RAI & BAT Merger Clears Antitrust Hurdle in U.S.
WINSTON-SALEM, N.C. — The tie-up of Reynolds American Inc. (RAI) and British American Tobacco (BAT) has moved one step closer to reality. Both companies continue to expect the transaction to close in the third quarter.
RAI announced that the waiting period under the Hart Scott-Rodino Antitrust Improvements Act of 1976 related to BAT's proposed acquisition of RAI has expired without a request for additional information by the U.S. Department of Justice or the Federal Trade Commission.
The expiration of the waiting period satisfies the transaction closing condition related to U.S. antitrust approval, according to RAI.
The transaction still requires approval by RAI and BAT shareholders and regulatory clearance from Japan. It is also subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement.
In January, RAI and BAT reached a $49-billion deal to join forces.
RAI agreed to be acquired by BAT in a cash and share transaction valued at $59.64 cents per share, which reflects a transaction price that is a 26.4-percent premium to the RAI stock price on Oct. 20, the day prior to publicly announcing BAT's initial proposal, as CSNews Online previously reported.
BAT already owns 42.2 percent of RAI. When the deal closes, RAI will become the largest operating subsidiary of BAT.
Winston-Salem, N.C.-based RAI is the parent company of R.J. Reynolds Tobacco Co.; Santa Fe Natural Tobacco Co. Inc.; American Snuff Co. LLC; Niconovum USA Inc.; Niconovum AB; and R.J. Reynolds Vapor Co. Its brands include Newport, Camel, Natural American Spirit, Grizzly, ZONNIC and VUSE.
London-based BAT is a global tobacco group with brands sold in more than 200 markets.