Imperial in talks to buy assets from Reynolds and Lorillard

Friday 11 July 2014 11.43
Imperial Tobacco, the world's fourth-largest tobacco group, in talks with US cigarette firms
Imperial Tobacco, the world's fourth-largest tobacco group, in talks with US cigarette firms

Imperial Tobacco, the world's fourth-largest tobacco group, said it was in talks with Reynolds and Lorillard to acquire certain assets and brands that could be sold by the two companies.

Reynolds and Lorillard are in advanced talks about a deal that would merge the second and third biggest US cigarette makers, Reuters has previously reported. 

"The USA remains one of the world's largest and most profitable cigarette markets," it said. "Imperial would proceed with an acquisition only if its terms met strict transaction criteria," the company added. 

Reuters reported in June that Imperial, known for Gauloises and Davidoff cigarettes, was evaluating a deal for assets likely to be divested from the two US tobacco companies. 

Some analysts have said a potential divestiture could top $5 billion and could include Reynolds brands like Kool and Salem. 

Purchasing sizeable assets from the US tobacco makers would give Imperial additional scale in a competitive and declining US tobacco market, roughly half of which is controlled by Marlboro cigarette maker Altria Group. 

Reynolds is 42% owned by British American Tobacco.