British American Tobacco, to become the largest tobacco company in the world

Economy Nilgun Salim
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British American Tobacco has made an offer to purchase the remaining stake that he does not possess, 58% of Reynolds American, for $47 billion. According to financial analysts, if completed, this deal will create the largest tobacco company in the world, reports Bloomberg.

The offer of cash and shares estimates the shares owned by Reynolds at $56.50, according to an announcement made on Friday by BAT. The value represents an increase of 20% in comparison to the last closing price.

The British company said it had no prior discussions with the board of Reynolds, where it already holds a 42% for over a decade.

The acquisition would be the largest purchase made initiated by a British company after the 23 June referendum when the kingdom decided to leave the EU.

The strategy adopted by BAT will increase the activity in an industry that is consolidating rapidly, where companies are seeking to offset the decreased number of smokers.

BAT has already spent $2.4 billion last year to buy Souza Cruz in Brazil and funded the purchase of Lorillard by Reynolds, in order to maintain its 42% stake in the Camel brand.

BAT shares rose by 3.5% after the announcement, increasing the company’s market value to 92.7 billion pounds.

The offer would create the largest listed tobacco company, overcoming Philip Morris International.

The British company was founded in 1875 and is the second largest tobacco company in the United States after Altria, which owns Philip Morris USA.