WINSTON-SALEM, N.C. -- Ahead of its announcement that it would complete its merger with Lorillard Inc. on June 12, Reynolds American Inc. said that it is moving forward on its merger with Lorillard Inc. by starting the process of assuming Lorillard’s debt. Reynolds American has announced that it intends to begin exchange offers of new senior notes in exchange for the $3.5 billion in outstanding senior notes of Lorillard Tobacco Co.
It also said it intends to solicit the consent of the eligible holders of each series of Lorillard Tobacco notes to amend the indenture under which the Lorillard Tobacco notes were issued concurrently with the exchange offers.
Although the exchange offers and consent solicitations have not yet commenced, Reynolds American said it intends to commence the exchange offers and consent solicitations in the near term, subject to the prior approval of the federal district court overseeing United States v. Philip Morris USA Inc., et. al. of the transfer of certain assets of Reynold American’s and Lorillard’s subsidiaries to a subsidiary of Imperial Tobacco Group PLC in connection with the closing of the merger.
The approval of the asset transfer is the last remaining significant condition to completion of the merger and related transactions, the company said.
As previously announced, Reynolds American and Lorillard Inc. have entered into—and the Federal Trade Commission has approved—a merger agreement with Lorillard surviving as a wholly owned subsidiary of Reynolds American.
Reynolds will purchase Lorillard for $27.4 billion and then divest certain assets from both Reynolds and Lorillard to Imperial Tobacco Group plc in a second $7.1-billion transaction. At the end of both transactions, Reynolds will own Lorillard’s Newport brand and Imperial will own three former Reynolds’ cigarette brands, Winston, Kool and Salem, as well as Lorillard’s Maverick cigarette and blu electronic-cigarette brands.
Bristol, England-based Imperial Tobacco Group PLC is a multi-national tobacco company offering cigarettes, fine-cut tobacco, cigars, rolling papers and tubes.
Greensboro, N.C.-based Lorillard offers the Newport, Kent, True, Maverick and Old Gold cigarette brands, as well as the blu eCigs electronic cigarette brand.
Reynolds American, Winston-Salem, N.C., is the parent company of R.J. Reynolds Tobacco, with cigarette brands including Camel, Pall Mall, Winston, Kool, Doral, Salem, Misty and Capri; American Snuff, with smokeless tobacco product brands including Grizzly and Kodiak; Santa Fe Natural Tobacco Co. Inc., which manufactures and markets Natural American Spirit 100% additive-free natural tobacco products; Niconovum USA Inc.; Niconovum AB, which market nicotine replacement therapy products in the United States and Sweden, respectively, under the Zonnic brand; and R.J. Reynolds Vapor Co., which makes and markets Vuse electronic cigarettes.
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