Convenience Store News

FEB 2017

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WWW.CSNEWS.COM | FEBRUARY 2017 | Convenience Store News 15 T hree months after a proposal was first put on the table, Reynolds American Inc. (RAI) and British American Tobacco (BAT) reached a $49-billion deal to join forces. Winston Salem, N.C.-based RAI is the parent com- pany of R.J. Reynolds Tobacco Co., the second-largest U.S. tobacco company, as well as Santa Fe Natural Tobacco Co. Inc., American Snuff Co. LLC, Niconovum USA Inc., Niconovum AB, and R.J. Reynolds Vapor Co. London-based British American Tobacco is a global tobacco group with brands sold in more than 200 mar- kets. BAT has market-leading positions in at least 55 markets around the world. RAI agreed to be acquired by BAT in a cash and share transaction valued at $59.64 cents per share. This is a 26.4-percent premium to the RAI stock price on Oct. 20, the day prior to the public announcement of BAT's initial proposal. The agreement represents a total enterprise value for all of RAI at more than $95 billion — a 7-percent premium to the original Oct. 20 proposal, resulting from BAT's incremental understanding of RAI's unique opportunities for growth in the attractive and profit- able U.S. tobacco market, explained Susan Cameron, executive chair of the RAI board of trustees. "What we are announcing today is compelling, strate- gic and serves to create further value. The acquisition of Reynolds American that we agreed to not only represents a significant premium for our shareholders, but also includes the potential for continued future growth through owner- ship in the combined company," she stated. Once completed, the acquisition will position RAI as BAT's largest operating subsidiary. The merger will increase share, generate significant cost efficiencies, enhance geographic diversification, and significantly strengthen research and development capabilities — all of which will result in enhanced growth opportunities for the combined companies, according to Cameron. RAI & BAT Shake Hands on Merger Agreement The $49B tobacco industry deal is expected to close in the third quarter By Melissa Kress

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