Reynolds American Inc., maker of Pall Mall and Camel cigarettes, has agreed to buy Lorillard Inc. for $27.4 billion, including debt. If completed, the merger would create a powerful rival to the largest tobacco company in the U.S.—Altria Group Inc., the holding company of Philip Morris USA and owner of the Marlboro brand.
Reynolds American, based in Winston-Salem, N.C., is the parent company of R.J. Reynolds, the second-largest tobacco company in the country. Combined with Greensboro, N.C.-based Lorillard, it would have a market value of about $50 billion and would give Reynolds the dominant menthol cigarette brand—Lorillard’s Newport—in a tobacco industry that has been declining in the U.S. and Western Europe for years.
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