British American Tobacco (BAT), one of the largest tobacco companies in the world, has sent US company Reynolds American Inc. proposed merger.
The constant increase in taxes, social movement against smoking, which causes cancer, a ban on advertising and the loss of hundreds of thousands of consumers - the tobacco industry conducts its business in a rather difficult conditions. But to stop their activities is not going to no one, because there are still a lot of smokers and cigarette market is not exhausted itself. British BAT (among other things produces cigarettes under the brands Lucky Strike and Pall Mall) is available in Germany, where he takes up almost 20% -s' share of the market.
This Friday, the tobacco industry giant has announced its intention to merge with the equally well-known American company Reynolds American Inc., bought 58% stake in the latter, the cost of 47 billion. Dollars.
It should be noted that British American Tobacco (BAT) already has its share of Reynolds, but extremely small. According to plans of the group will unite under his command brands such as Pall Mall, Dunhill, Lord, Prince sowie Newport and Rothmans. Reynolds American now focused on the US market, as international business was sold of Japan Tobacco in 1999th.
Combining the two companies, believes the head of BAT Nicandro Durante, strengthen the business in the future. The same opinion is shared by the German Association of manufacturers of tobacco products. At the conclusion of the transaction - in the tobacco business will be a new conglomerate, which, naturally, will have more opportunities than he did not plan to do: manufacture of electronic cigarettes or tobacco to develop a new structure, releasing fewer toxins when burned.
The presence of the combined company in the emerging markets in South America, Africa, the Middle East and Asia will be strengthened, too. Most international tobacco companies have focused their activities on these countries in order to compensate for the decline in demand in Western Europe. In Germany, for example, cigarette consumption decreases each year by approximately 1%. Since 2002, sales have fallen by more than 40%.
We know that $ 20 billion. The BAT already handed Reynolds in cash, the rest of 27 billion dollars. It is planned to transfer the shares in the company the BAT.