• May 26, 2024

Acquisition spoils to winner

 Acquisition spoils to winner

When one corporation buys another, the headquarters spoils tends to go to the buyer, according to a story by Richard Craver for the Winston-Salem Journal that touched upon the sale of Lorillard Inc. and the proposed sale of Reynolds American Inc.

With the loss of each headquarters, well-paying jobs went to the acquiring company and there was typically a siphoning and redirection of community support funds.

Greensboro had experienced two body blows, one of which had occurred when ‘the main assets of Lorillard Inc. were sold in June 2015 to ITG Brands LLC, the US subsidiary of Imperial Brands Plc, in a four-party deal involving Reynolds American Inc, Craver wrote.

When it came to British American Tobacco’s likely $49.4 billion purchase of Reynolds, civic and elected officials were said to have their fingers crossed that philanthropic contributions would remain unaltered as much as possible.

Reynolds spokesman Bryan Hatchel said philanthropy was a big part of Reynolds’ legacy, going back to the founder Richard Joshua Reynolds. “He started a legacy of philanthropy that reached into this community of Winston-Salem, and we continue that effort today,” Hatchell said. “Part of our transforming tobacco strategy includes transforming communities in which our employees live and work.”

Winston Salem’s mayor Allen Joines has said part of his confidence of a business-as-usual mindset from BAT is the fact it had been embedded in the Reynolds cultures since acquiring its 42.2 percent ownership stake in July 2004.