Reynolds American (RAI) on Friday completed its acquisition of Lorillard and, in doing so, ‘significantly strengthened, balanced and diversified’ its brand portfolio.
As a result of the acquisition, Lorillard is now a wholly owned subsidiary of RAI, and former Lorillard shareholders will own about 15 percent of RAI’s common stock.
In a note posted on its website, RAI said its operating companies now had key brands across major industry categories: Newport, Camel, Pall Mall and Natural American Spirit in combustible cigarettes; Grizzly in smokeless tobacco; and VUSE in the vapor market.
‘In the acquisition, former Lorillard shareholders will receive $50.50 in cash and 0.2909 of a share of RAI common stock for each share of Lorillard common stock they owned,’ RAI said. ‘In the related divestiture transactions, subsidiaries of RAI have sold the KOOL, Salem, Winston, Maverick and blu eCigs brands, and other assets and liabilities, to ITG Brands, LLC, a subsidiary of Imperial Tobacco Group, PLC, for total consideration of approximately $7.1 billion in cash.
‘Additionally, British American Tobacco p.l.c. maintained its approximately 42 percent ownership in RAI through an equity investment of approximately $4.7 billion.’
“As a result of this acquisition, Reynolds American has a significantly strengthened, balanced and diversified portfolio of iconic brands across all key categories – the most balanced in the industry,” said Susan M. Cameron, RAI’s president and CEO.
“The transaction supports RAI’s efforts to lead the transformation of the tobacco industry. The synergies, improved operational efficiencies and higher sales volumes generated by this combination will better position RAI’s operating companies to fuel continued investment in brand building, R&D and innovation for the long-term future of the company.”