Reynolds & Lorillard Confirm Merger Talks | ConvenienceStoreNews
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    Reynolds & Lorillard Confirm Merger Talks

    WINSTON-SALEM and GREENSBORO, N.C. – Reynolds American Inc. (RAI) and Lorillard Inc. issued separate statements on Friday confirming they are actively in discussions regarding a potential merger.

    In written statements, both companies stressed that “no agreement has been reached and there can be no assurances that any transactions will result.” Each company also stated that they do not intend to comment further on any potential merger unless “circumstances dictate otherwise.”

    Both analysts and media outlets have recently reported that RAI will purchase Lorillard in the near future. Wells Fargo Securities LLC Senior Analyst Bonnie Herzog has pegged the potential purchase at up to $80 per Lorillard share.

    Still, there are several moving parts before a RAI-Lorillard deal becomes official. British American Tobacco (BAT) currently owns 42 percent of RAI. According to RAI’s Friday news release, BAT is actively involved in the merger discussions and “expects to support the transaction by subscribing for additional shares in RAI” in order to maintain its 42-percent stake.

    In addition, both companies confirmed that Imperial Tobacco Group plc is also involved in the RAI-Lorillard merger talks. If a deal were reached, Lorillard and RAI confirmed that Imperial is in talks to buy some of the combined company’s brands and assets, likely in response to U.S. antitrust concerns that could be potentially raised after a deal is announced.

    Winston-Salem-based Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Co., American Snuff Co. LLC, Santa Fe Natural Tobacco Co. Inc., Niconovum USA Inc., Niconovum AB and R.J. Reynolds Vapor Co.

    Greensboro-based Lorillard Inc. is known for its Newport tobacco brand. It is also the parent company to Kent, True, Maverik and Old Gold brands, as well as the blu eCigs and SKYCIG electronic cigarette brands.

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