Reynolds American Inc's proposed $25 billion acquisition of smaller rival Lorillard Inc shows how the tobacco company is placing its bets on the market for menthols even as a growing number of smokers opt for e-cigarettes.With the deal, Reynolds American picks up Newport menthol cigarettes, one of the few U.S. brands that is gaining share in a shrinking market. At the same time, Reynolds is giving up blu - the top-seller in the e-cigarette market seen by many as the tobacco industry's future - to Britain's Imperial Tobacco Group.As part of the deal, Imperial will purchase Reynolds' Salem, Winston and KOOL and Lorillard's Maverick brands in a move meant to ease potential antitrust concerns. Experts say that still may not satisfy regulators.Sources familiar with the transaction said gaining the blu brand made the deal more attractive to Imperial. While cigarette sales volume has been falling about 4 percent a year, e-cigarette sales have been booming. Reynolds sells its own e-cigarettes under the Vuse brand but controls less than 5 percent of the market, according to market research firm Euromonitor International.
Lorillard, Inc. (Lorillard) is the manufacturer of cigarettes in the United States. Shares of LO fell by 9.61% or $-6.462/share to $60.76. In the past year, the shares have traded as low as $41.56 and as high as $67.46. On average, 3259580 shares of LO exchange hands on a given day and today's volume is recorded at 23085316.
Reynolds American Inc. (RAI) is a holding company. Shares of RAI fell by 6.01% or $-3.795/share to $59.38. In the past year, the shares have traded as low as $46.55 and as high as $63.39. On average, 2264170 shares of RAI exchange hands on a given day and today's volume is recorded at 7789469.
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