You are here
NEW YORK -- Brown & Williamson parent British American Tobacco says it's ready to buy another tobacco company, but won't comment on a report there have been on and off talks about combining Louisville's B&W with R.J. Reynolds Tobacco Holdings Inc.
The Wall Street Journal yesterday, citing unidentified people familiar with the talks, reported yesterday that negotiations have been going on for some time and any deal would not be imminent. A combination of the two have been speculated about by analysts for some time and the newspaper report didn't appear to have any effect on the company's stock prices. A bigger issue for tobacco companies yesterday was speculation that an Illinois appellate court may decide Philip Morris USA should not have been allowed to post a lower bond to appeal a $10.1 billion verdict.
Brown & Williamson and RJR both have similar cases pending in Illinois. Philip Morris parent Altria and RJR fell sharply yesterday while BAT dropped slightly.
The Wall Street Journal reported that under one scenario, RJR would acquire Brown & Williamson in a stock transaction that would make BAT a major shareholder in RJR. Another option is to create a joint venture comprised of significant portions of each of the U.S. businesses and that would be owned by the parent companies, the Journal report said. There also has been recent speculation that BAT might take over RJR.
"It is no secret that we are looking for acquisitions, but what we have never done is to discuss any individual company," BAT spokesman Dave Betteridge said. "It's not surprising there are rumors and things because we've said, having completed the successful merger of Rothmans into BAT, that we're looking again. There are relatively few large players left that we would consider."
Betteridge added that the company has no plans to leave the U.S. business, adding that to be a global business, BAT has to be in the United States.
RJR spokesman Seth Moskowitz said the company wouldn't comment on speculation.
R.J. Reynolds, of Winston-Salem, N.C., makes Camel and Winston cigarettes. Number-three U.S. cigarette company Brown & Williamson's leading brand is Kool, and the company employs 500 people at its Louisville headquarters.