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British American Tobacco $47 billion bid for Reynolds American

17/1/2017
Public acquisition
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$ 49.4 billion

Announced

17/1/2017

Overview:

  • British American Tobacco (BAT) has reached an agreement to acquire Reynolds American for $49.4 billion.
  • BAT was originally proposing $47 billion in October 2016 but increased the offer to $59.64 a share in cash and stock. 
  • To support $24.4 billion cash component of the transaction, Deutsche Bank and HSBC coordinated a syndicated loan facility.
  • BAT has already acquired a 42% stake in the rival company in 2004.
  • Reynolds American sells such brands as Lucky Strike and Camel.
  • If the deal goes through, approximately $20 billion would be paid in cash and $27 billion in BAT shares.
  • After merging the new firm would be the largest listed tobacco company in the world.
  • Deutsche Bank and UBS are acting as joint corporate brokers and sponsors to BAT.

Anna Kozakova - Journalist

Jurisdictions:

United States
United Kingdom

Deal type:

Public acquisition

Practice area:

M&A

Industry sector:

Consumer goods and services

Firms:
A&O Shearman

Party: Deutsche Bank (Lead manager)

Party: HSBC (Lead manager)

Lawyer: Greg Brown

Cravath Swaine & Moore

Party: British American Tobacco (Acquirer)

Lawyers: Alyssa Caples, David Perkins, Ting Chen

Davis Polk & Wardwell

Party: Deutsche Bank AG Na ON (Sponsor)

Party: UBS (Sponsor)

Lawyers: Phillip Mills, Will Pearce

Herbert Smith Freehills

Party: British American Tobacco (Acquirer, Borrower)

Lawyers: Alex Kay, James Palmer, Will Nevin

Jones Day

Party: Reynolds American (Target)

Lawyers: Leon Ferera, Randi Lesnick, Vica Irani

Simpson Thacher & Bartlett

Party: JPMorgan Chase (Financial adviser)

Lawyer: Sebastian Tiller

Weil Gotshal & Manges

Party: Reynolds American (Target, Management)

Lawyers: Frank Adams, Matthew Gilroy, Michael Aiello, Michael Francies

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