Reynolds American agreed on Tuesday to buy its smaller rival, Lorillard, for $27.4 billion, uniting two of the country's biggest tobacco producers in a bet that bigger is safer in a declining industry.
Under the terms of the deal, Reynolds will pay $68.88 for every Lorillard share.
Two other companies are also involved in the complicated transaction. The Imperial Tobacco Group plans to buy several billion dollars' worth of brands — including Kool, Salem and Winston cigarettes and Blu e-cigarettes — from the combined company for $7.1 billion.
And British American Tobacco, which already owns 42 percent of Reynolds, will buy additional shares to maintain that same level of ownership in the combined company and help finance the deal.
Under the terms of the deal, Reynolds will pay $68.88 for every Lorillard share.
Two other companies are also involved in the complicated transaction. The Imperial Tobacco Group plans to buy several billion dollars' worth of brands — including Kool, Salem and Winston cigarettes and Blu e-cigarettes — from the combined company for $7.1 billion.
And British American Tobacco, which already owns 42 percent of Reynolds, will buy additional shares to maintain that same level of ownership in the combined company and help finance the deal.
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