$47bn offer from London firm

BAT to create tobacco giant with Reynolds bid

British American Tobacco has lodged a $47 billion (£38bn) bid to take full ownership of Camel cigarettes owner Reynolds American.

A merger would create the world’s largest listed tobacco company by net turnover and operating profit.

It would also be the biggest foreign acquisition by a British company for some time defies those who believe a weak pound will stop British companies buying overseas rivals.

London-listed BAT already owns 42.2% of the company, and is offering $56.50 per share, representing a 20% premium, made up of $20bn in cash and $27bn in BAT shares.

BAT’s chief executive, Nicandro Durante, said: “We have been a shareholder in Reynolds since its creation in 2004 and have benefited from its growth in the US market. The acquisition of Lorillard in 2015 has further strengthened Reynolds’s business.

“The proposed merger of our two great companies is the logical progression in our relationship and offers all shareholders a stake in a stronger, truly global tobacco and Next Generation Products company.

“BAT is proud of its track record of consistent delivery for shareholders and this transaction would further strengthen that delivery in the future.”

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