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Canadian cigarette maker Rothmans Inc. said it was set to acquire Santa Fe Natural Tobacco Co., a privately-held U.S tobacco company, for $275 million in stock, debt and cash.
The deal, which is expected to close by the end of the year, marks Rothmans first U.S. acquisition.
"It is an extremely lucrative investment in a small company that has grown since 1982 to demonstrate some big volumes and profitable growth," Paul Jewer, Rothmans chief financial officer, told Reuters.
Rothmans, which is 29 percent held by the public, owns 60 percent of the Benson & Hedges and Rothmans cigarette brands. New York-based cigarette maker Philip Morris Cos. Inc., the world's largest tobacco company, owns the other 40 percent of Rothmans and Benson & Hedges, Canada's number-two cigarette brand with an 18-percent market share.