$27B Tobacco Merger Creates Cigarette 'Duopoly'
Reynolds, Lorillard to merge
By Kevin Spak, Newser User
Posted Jul 15, 2014 8:11 AM CDT
This Oct. 21, 2009 file photo shows Camel cigarettes, a Reynolds American brand, in Philadelphia.   (AP Photo/Matt Rourke, File)

(Newser) – Reynolds American, the maker of Camel and Pall Mall cigarettes, has agreed to buy Lorillard, the maker of Newport menthols, in a deal that will make it a strong second to Marlboro manufacturer Altria in the US tobacco market, the Wall Street Journal reports. Reynolds will pay a combination of cash and stock amounting to about $27.4 billion. It will also sell off its Kool, Salem, Winston, Maverick, and Blu eCigs brands to Imperial Tobacco Group for $7.1 billion, in the hopes of easing antitrust concerns—though analysts say regulators will be taking a hard look at the deal anyway.

Altria controls about half of the US cigarette market, while Reynolds and Lorillard controlled 25% and 15%, respectively, before the tie-up. "It’s transformative because it creates a duopoly in the US," one analyst tells Bloomberg, which will help dull the pain of a longstanding downward sales trend. The deal also serves to boost Reynolds' presence in tobacco's fastest-growing product categories, menthols and e-cigarettes, the New York Times points out.

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sandrae
Jul 22, 2014 11:10 AM CDT
Something's got to give. Cigarettes have controlled people for too long... people who need that extra little something to do. It's nervousness... got to do something with their hands, don't want to stand there looking like a bump on a log, wanting to look "with it" at parties. The cough should send chilling messages, but the nervous are also the daring. What I do not like is all the poisons that are in cigarettes -- I am trying to figure that one out. They are getting into body tissues and smoker brains. I know too many smokers who are absolutely bipolar or double personalities. What I hate most is the selfishness of smokers; they want to blow it on you or in the same room you are in. Their kids do not know they have the right to tell their smoking parents, "please don't smoke in my room or around my food. I'm closing my door -- buy me a fan". I do not think that air conditioners are the remedy. They just cold store the smoke in lungs. Maybe marijuana will be an intervenor of sorts. Something's got to give.
Briton
Jul 16, 2014 7:06 AM CDT
This deal should have been subject to anti-trust action. Then again, the corporate world rules the American government. Meanwhile, the sheep are all grazing - watching sports, drinking beer, smoking their weed. It's no wonder the rich always win.
OrneryPup
Jul 16, 2014 2:46 AM CDT
Smoke, Smoke, Smoke That Cigarette Written by Merle Travis and Tex Williams Now I'm a feller with a heart of gold And the ways of a gentleman I've been told The kind of guy that wouldn't even harm a flea But if me and a certain character met The guy that invented the cigarette I'd murder that son-of-a-gun in the first degree It ain't cuz I don't smoke myself And I don't reckon that it'll harm your health Smoked all my life and I ain't dead yet But nicotine slaves are all the same At a pettin' party or a poker game Everything gotta stop while they have a cigarette Smoke, smoke, smoke that cigarette Puff, puff, puff and if you smoke yourself to death Tell St. Peter at the Golden Gate That you hate to make him wait But you just gotta have another cigarette