RJ Reynolds

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R.J. Reynolds is a tobacco company based in the United States (U.S). British American Tobacco (BAT) bought the company and its holding company Reynolds American Inc. (RAI) 2017.1

Before the takeover by BAT, RJ Reynolds Tobacco was the second-largest tobacco company in the US, making Camel, Pall Mall, Doral, Kool, Winston and Salem cigarettes.

Acquired Lorillard

On 15 July 2014, after over a year and a half of discussions, the company announced it had signed a deal to acquire its smaller competitor, Lorillard. The sale, said to cost US$27.4 billion, was made in hopes that it would help Reynolds compete with market leader Altria.2 The two companies combined also strengthened its geographical distribution as Reynolds had a strong market presence in the western US, and Lorillard in the eastern.

With the acquisition of Lorillard, Reynolds held about 33% of the cigarette market in the US at the time. Reynolds Chief Executive Susan M. Cameron said at the time: “It takes us to the next chapter of transforming the tobacco industry.”

Sold Tobacco and E-Cigarette Brands to Imperial

To minimise antitrust concerns that the acquisition would give Reynolds an unfair advantage in the market, Reynolds agreed to sell the blu line of e-cigarettes along with the Kool, Salem, Winston and Maverick cigarette brands, and a manufacturing plant to Imperial Tobacco. The acquisition was completed in June 2015 for a reported US$7 billion (GB£4.2bn).34

Vuse E-Cigarettes

Reynolds launched Vuse e-cigarettes in the US in 2013.5 In July 2014, BAT formed a “strategic partnership” with RAI in order to commercialise each other’s e-cigarette and heated tobacco products (HTPs).6

When BAT bought RAI in 2017 it also acquired Vuse.7

Personnel

After its acquisition by BAT, there were significant changes to senior staff at RAI. Ricardo Oberlander became President and Chief Executive Officer. Oberlander was previously on the Board of Directors for RAI from December 2014 until the acquisition by BAT, and Chair of the Board at BAT Souza Cruz between 2013 and 2016. In 2019 he reported to Jack Bowles, CEO of BAT.

Details of the current Reynolds Management Team can be found on the R.J. Reynolds website and the RAI website.

TobaccoTactics Resources

Relevant Links

References

  1. British American Tobacco, BAT completes Acquisition of Reynolds, 25 July 2017, accessed October 2019
  2. M.J. De la Merced, C. Bray, To Compete With Altria, Reynolds American Is Buying Lorillard, The New York Times, 15 July 2014, accessed October 2019
  3. Imperial Brands, About Us: History, website, undated, accessed October 2019
  4. A. Armstrong, Imperial Tobacco breathes easy after US regulator approves cigarette deal, The Telegraph, 27 May 2015, accessed October 2019
  5. D. Mangan, Reynolds American Sees E-Cigarette Launch as ‘Game Changer’, CNBC, 6 June 2013, accessed October 2019
  6. US Department of Health and Human Services, E-Cigarette Use Among Youth and Young Adults: A Report of the Surgeon General. Appendix 4.1: Major E-Cigarette Manufacturers, Centers for Disease Control and Prevention, 2016
  7. British American Tobacco, BAT Completes Acquisition of Reynolds, BAT press release, 25 July 2017, accessed June 2019