LONDON”•British American Tobacco said Friday it had launched a $47-billion bid for control of rival Reynolds American, eyeing rapid expansion into US and emerging markets and e-cigarettes.
The deal, worth the equivalent of 43 billion euros, would create the world’s largest listed tobacco company by net turnover and operating profit, BAT said in a statement.
BAT said the move would give it “a leading position in the US tobacco market” and “a significant presence in high growth emerging markets across South America, Africa, the Middle East and Asia, together with the most attractive developed markets”.
The blockbuster proposal would bring together BAT brands Dunhill, Kent and Lucky Strike cigarettes with Reynolds American’s Camel and Newport.
The combined group would have a “world class pipeline” of so-called next generation products, like e-cigarettes, in a fast-growing part of the market.
Most global tobacco firms are looking to emerging markets to offset sliding demand in Western Europe, where high taxes, public smoking bans and health concerns have persuaded many people to give up.
At the same time, in recent years there has been rapid growth in e-cigarettes, which are battery powered devices that heat a nicotine liquid.
The cash-and-shares offer would see BAT purchase the 57.8-percent of Reynolds American that it does not already own.