Washington (EFE).- The United States' second- and third-largest tobacco companies, Reynolds American and Lorillard, confirmed that they are negotiating a merger deal that would create a giant with a $56 billion market value.
An eventual tie-up of the makers of the Camel and Newport brands would form a company with a 42 percent share of the U.S. market, second only to the 50 percent controlled the Altria Group, the maker of Marlboro.
Both the New York Times and The Wall Street Journal said the potential merger faces significant obstacles, including the scrutiny of anti-trust regulators.
Friday's announcement could alter the landscape of a U.S. tobacco industry that has been hit by years of steady declines in smoking, including an estimated 4 percent drop in consumption last year.
The United States is home to approximately 42 million smokers, equivalent to 18 percent of the adult population, down from 21 percent a decade ago and 43 percent in 1965, according to the Centers for Disease Control and Prevention.
Among the few growth segments in the $100 billion U.S. tobacco market are e-cigarettes and menthol cigarettes, both of which categories are currently led by Lorillard. EFE
(c) 2014 EFE News Services (U.S.) Inc.
Original headline: U.S.' No. 2, No. 3 tobacco companies in merger talks
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