British American Tobacco (BAT) has agreed a takeover of Reynolds American, the maker of Camel and Newport cigarettes, for a consideration of $49.4 billion to acquire the remaining 57.8 per cent of Reynolds not already owned by BAT.

Reynolds shareholders will receive for each Reynolds share $29.44 in cash and 0.5260 BAT ordinary shares, representing a premium of 26 per cent over the closing price of Reynolds common stock on  October 20, 2016.

NYSE-listed Level III ADRs representing BAT ordinary shares will be issued following registration under US securities laws, a statement said.

The merger will create a balanced presence in high growth emerging markets and high profitability developed markets, combined with direct access to the attractive US market, it added.

BAT’s chief executive, Nicandro Durante said: "We are very pleased to have reached an agreement with the Transaction Committee and Board of Reynolds and we look forward to putting the recommended offer to shareholders.”

“We have been shareholders in Reynolds since 2004 and we have benefited from the success of the present management team’s strategy, including its acquisition of Lorillard, which we supported with our own investment in 2015. BAT has consistently executed a winning strategy and has a proven track record of delivering strong results and returns for its shareholders while successfully investing for future growth.

“Our combination with Reynolds will benefit from utilising the best talent from both organisations. It will create a stronger, global tobacco and NGP (next generation products) business with direct access for our products across the most attractive markets in the world.  We believe this will drive continued, sustainable profit growth and returns for shareholders long into the future,” he added. – TradeArabia News Service