Tobacco giants R.J. Reynolds and Brown & Williamson to merge
Monday, October 27th 2003, 12:00 am
By: News On 6
CHARLOTTE, N.C. (AP) _ R.J. Reynolds Tobacco and British American Tobacco PLC agreed to merge Monday, bringing together the second and third largest tobacco companies in the United States.
British American is the parent company of rival Brown & Williamson Tobacco Corp. The deal comes a month after R.J. Reynolds trimmed 40 percent of its work force.
Under the deal, a new publicly traded holding company will be formed called Reynolds American Inc., the companies said in a joint statement.
The new company will have annual sales of about $10 billion and about 30 percent of U.S. cigarette sales.
Under terms of the agreement, BAT will own 42 percent of Reynolds American through its Brown & Williamson subsidiary. Existing RJR shareholders will control 58 percent of the company through a one-for-one exchange for stock of the new company, the companies said.
The new company plans to consolidate headquarters and operations in Winston-Salem, RJR's current home. The full integration of the companies is expected to result in more than $500 million in annual savings.