FTC Calls For Addl. Information On Reynolds, Lorillard Merger - Update

(RTTNews) - Reynolds American Inc (RAI) and Lorillard Inc (LO) said Friday the Federal Trade Commission has requested for additional information related to Reynold's pending acquisition of Lorillard and divestiture of some brands to Imperial Tobacco Group plc (IMT.L).

The additional information was part of a second request by the FTC, which is extending its review of the deal, the tobacco companies said.

The effect of the second request is to extend the waiting period imposed until 30 days after Reynolds American and Lorillard substantially comply with the request.

In mid-July, Reynolds American, the parent company of R.J. Reynolds Tobacco Co, agreed to acquire Lorillard in a cash-and-stock deal valued at $27.4 billion.

To assuage antitrust concerns, Reynolds American and Lorillard agreed to sell brands such as Winston, Kool and Blu for $7.1 billion to Imperial Tobacco.

Also as part of the deal, British American Tobacco plc (BATS.L, BTI), Reynolds American's largest shareholder and which agreed to vote its shares in favor of the merger, will maintain its 42 percent ownership in Reynolds American through an investment of about $4.7 billion.

The companies expect to close the merger and the Imperial Tobacco deal in the first half of 2015. Upon closing, Lorillard shareholders will own about 15 percent of Reynolds American.

Reynolds American stock is trading at $57.98, down $0.03 or 0.03%, on a volume of 436k shares on the NYSE.

Lorillard is trading at $59.32 on a volume of 546k shares on the NYSE.