Legal News

Reynolds American Inc. Buying Lorillard Inc.
Download PDF

lorillard-tobacco-company

It was announced on Tuesday that Reynolds American Inc. will buy Lorillard Inc. for $25 billion excluding debt, according to Bloomberg. These are two of the biggest companies in the tobacco industry in the United States. The deal will leave two companies in control of 90 percent of the tobacco industry in the country.

Reynolds makes Pall Mall and Camel cigarettes. It is going to pay cash and stock with a value of $68.88 per share, according to the statement. The British American Tobacco Plc will fund $4.8 billion of the deal, which allows it to keep a 42 percent stake in Reynolds.

  
What
Where


In an effort to remove antitrust concerns, Imperial Tobacco Group Plc will pay $7.1 billion to acquire Kool and Blu e-cigarettes.

Owen Bennett is an analyst at Nomura Holdings Inc. in London. Bennett said, “There’s a lot of risk. There are a lot of factors involved.”

When debt is including, the purchase will reach $27.4 billion. The newly created company will boast $11 billion of annual revenue. This is close to two-thirds the annual sales of United States leader Altria Group Inc. It will have an operating income of $5 billion.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




According to Reynolds, the combined company is going to account for 33 percent of the country’s industry. This will leave two competitors in the market selling nine of every 10 cigarettes. Imperial announced that its market share is going to triple to 9.5 percent from 2.5 percent.

The deal is going to have to pass antitrust hurdles, which is why Imperial is going to acquire Winston, Salem and Maverick.



Philip Gorham is an analyst from Morningstar Inc. in Amsterdam. Gorham said, “The most surprising element is that Imperial is taking the e-cigarette business from Lorillard. It was probably the sweetener that convinced them to buy what is essentially a selection of third-tier brands.”

In the announcement, Reynolds said that the deal will help save the company $800 million in costs per year.

Imperial Tobacco is being represented by Credit Suisse Group AG and Goldman Sachs Group Inc



 

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Corporate/Derivatives Transactions Attorney with 4+ years of experience

USA-NY-New York City

New York City office of our client seeks corporate/derivatives transactions attorney with 4+ years o...

Apply Now

Corporate Attorney with 4-5 years of capital markets experience

USA-NY-New York City

New York City office of our client seeks general corporate / capital markets / public company repres...

Apply Now

Merger/Acquisitions Attorney with 4-5 years of private equity experience

USA-NY-New York City

New York City office of our client seeks attorney with 4-5 years of mergers and acquisitions/private...

Apply Now

Labor and Employment Attorney with 3-4 years of litigation experience

USA-CA-Los Angeles

Los Angeles office of our client seeks labor and employment attorney with 3-4 years of litigation ex...

Apply Now

RELEVANT JOBS

Intellectual Property Litigation Associate

USA-NV-Reno

The Reno office of Brownstein Hyatt Farber Schreck LLP seeks an associate with 1-3 years of experien...

Apply now

Paralegal / Legal Secretary

USA-CA-Los Angeles

$36,000 a year Phones, filing, drafting complaints, discovery, e-file, Pacer for...

Apply now

Family Law Attorney

USA-WA-Tacoma

Family law firm with offices in Tacoma, Bellevue, and Seattle is seeking a family law lawyer with at...

Apply now

Estate Planning Legal Assistant

USA-NC-Raleigh

We are a rapidly growing full-service law firm with multiple offices throughout North Carolina. We c...

Apply now

Most Popular

SEARCH IN ARCHIVE

To Top