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Technology

British American Tobacco lights up $47bn Reynolds takeover

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By John Glenday, Reporter

October 21, 2016 | 1 min read

British American Tobacco (BAT) has revealed plans to buy out the remaining 57.8 per cent stake in Reynolds, its US partner, in a deal valued at $47bn.

Motivated by a desire to maximise efficiencies of scale, BAT believes it can realise $400m of cost savings following the deal, which it views as a ‘logical progression’ of a 2004 decision to become a minority shareholder in Reynolds.

Such a move, if concluded, would draw some of the cigarette industries biggest brands such as Lucky Strike, Camel and Dunhill, under one umbrella although it would need the approval of all the directors of the US firm.

Whilst negotiations have yet to formally get underway between the two companies, analysts believe it likely that the deal will go ahead owing to the close working relationship between both businesses.

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