Wednesday, January 18, 2017

British American Tobacco Ups Reynolds Bid

Most everyone is aware by now but just in case you had no idea British American Tobacco(BTI) upped it's bid for Reynolds American(RAI) by $2 billion to $86 billion total consideration. Based on the terms of the deal each share of Reynolds is worth $59.64.  The deal still retains it's cash/stock split with shareholders receiving $29.44 in cash, and 0.5260 ordinary shares of BTI. That's adjusted from the original terms of the deal at $24.13 and 0.5502 announced in October 2015.

The deal is being funded with cash on hand and a variety of debt instruments. The company expects the transaction to close in Q3 2017, but I think that might be a bit soon. Here is an excerpt from the Press Release.

“Through this transaction, we form an industry leader that will focus on innovation and brand building,” said Susan M. Cameron, executive chairman of Reynolds American’s board of directors. “This combination will create a truly global tobacco company with multiple iconic tobacco brands, and a world-class pipeline of next generation vapor and tobacco-heating products.” 



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