Reynolds American is this week expected to respond to a $47bn (£38.4bn) takeover offer from British American Tobacco (BAT), in a move that would create the world’s largest listed tobacco group by turnover.
FTSE 100-listed BAT, which already owns 42.2 per cent of Reynolds, said on Friday it will pay $56.50 per share in a cash and shares deal for the remaining 57.8 per cent stake in the US maker of Camel cigarettes.
The surprise, post-Brexit vote offer is at a 20 per cent premium to Reynolds’ closing share price on 20 October. However, some analysts believe BAT will need to raise its offer to acquire the group.
The access to the American market BAT would gain means a tie-up “makes imminent sense”, according to Shane MacGuill, head of tobacco at Euromonitor International.
BAT has said it could make $400m worth of cost savings if the companies combine.
The outgoing chief executive of Reynolds will be in line for a multi-million dollar payout if Reynolds agrees to merge. Last week, the company announced chief operating officer Debra Crew will succeed Cameron on 1 January.