BAT To Buy Remaining 57.8% Stake In Reynolds For $49.4 Bln - Quick Facts

(RTTNews) - British American Tobacco plc (BATS.L, BTI), which owns 42.2 percent of Reynolds American Inc. (RAI), announced Tuesday that it has agreed to acquire the remaining 57.8% stake for $59.64 per Reynolds share or total $49.4 billion.

Both companies have agreed on the terms of a recommended offer for BAT to acquire the remaining stake. Reynolds shareholders will receive for each Reynolds share $29.44 in cash and 0.5260 BAT ordinary shares. The total purchase price comprises approximately $24.4 billion in cash and $25.0 billion in BAT ADRs. The initial proposal valued Reynolds at $56.50 per share.

The per share price represents a premium of 26% over the closing price of Reynolds common stock on October 20, being the last day prior to BAT's announcement of a proposal to merge with Reynolds.

The transaction will be effected through a US statutory merger.

The companies said the deal would create a stronger, truly global tobacco and Next Generation Products company. The transaction would be earnings per share accretive in the first full year and targets mid-single digit EPS accretion in year 3, with the transaction beating the Group's WACC for the US by year 5.

Both the BAT and the Reynolds' Boards will recommend the transaction to their respective shareholders. A break fee of up to $1 billion is payable by either BAT or Reynolds under certain circumstances.