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United States : Lorillard's $27.4 Billion Sale to Reynolds American

July 16, 2014

The Firm is representing Lorillard, Inc. in connection with its proposed sale to Reynolds American Inc. in a cash-and-stock transaction currently valued at $27.4 billion, including the assumption of net debt. Under the terms of the transaction, Lorillard shareholders will receive, for each Lorillard share, $50.50 in cash and 0.2909 of a share in Reynolds American s stock, representing $68.88 per share based on Reynolds American s closing share price yesterday. That represents a premium of 40.4% to Lorillard s stock price on February 28th, 2014, the last trading day prior to the initial media speculation around a possible transaction.

In connection with the transaction, Imperial Tobacco, one of the largest international tobacco companies based in the U.K., agreed to purchase certain cigarette brands and other related assets from Reynolds and Lorillard for $7.1 billion in cash in a transaction that is conditioned on the completion of the merger. In addition, British American Tobacco (BAT), Reynolds American s largest shareholder, has agreed to invest $4.7 billion as part of Reynolds American's proposed acquisition of Lorillard, enabling BAT to maintain its 42% equity position in the enlarged business, and BAT agreed to vote its Reynolds shares in favor of the transaction. The transaction, which is expected to close in the first half of 2015, is subject to shareholder and regulatory approval and other customary closing conditions.

Lorillard is one of the largest tobacco companies in the U.S. and maker of Newport cigarettes. Founded in 1760, Lorillard Tobacco is the oldest continuously operating tobacco company in the U.S. Lorillard, through its subsidiaries, is also a leading global electronic cigarette company, marketed under the blu eCigs and SKYCIG brands.

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Source: TendersInfo (India)

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