Bat offers to buy u. s. tobacco firm reynolds in $47 billion deal market risk premium 2012
LONDON (Reuters) – British American Tobacco has offered to buy out U.S. Market risk premium us cigarette maker Reynolds American Inc in a $47 billion takeover that would create the world’s biggest listed tobacco company with brands including Newport, Lucky Strike and Pall Mall.
The cash-and-stock deal would mark the return of BAT to the lucrative and highly regulated U.S. Risk management system in stock market market after a 12-year absence, making it the only tobacco giant with a leading presence in American and international markets.
It would also give the British company – which has been bolstered by a strong share price since the country voted to leave the European Union – more premium brands such as Camel which it can sell in countries like Russia and Turkey where demand for Western cigarettes is still
The marriage would also unite each company’s efforts in the fast-developing world of e-cigarettes, which the companies say are less dangerous than smoking – a habit that kills about six million people worldwide each year.
“Our decision to place BAT’s ratings on review for downgrade recognizes that, while the acquisition will enhance BAT’s business profile, it could lead to a significant deterioration in BAT’s credit metrics,” says Ernesto Bisagno a Moody’s Vice President and lead analyst for BAT.
A Reynolds takeover by BAT, which already owns 42 percent of the U.S. Market risk career path group, has long been seen as part of an inevitable wave of global consolidation in a mature industry. Market risk career Yet the timing, less than three weeks before a U.S. Equity risk premium australia 2015 presidential election, was unexpected.
The completion of last year’s purchase by Reynolds of Lorillard, which gave it the popular Newport brand, and the current relative valuations of the two companies’ shares were the main reasons the deal was resurrected in recent weeks, said three sources close to the situation.
“It moved very quickly on the back of the falling pound,” said one of the sources, who all declined to be named in discussing private matters. Subject to market risk A final decision was made this week, they said.
A 12 percent rise in BAT’s shares since Britons opted for Brexit in June, and a 7 percent fall for Reynolds, brought the companies’ trading multiples closer together, making a deal more affordable, the sources said.
The move increased the value of the share element of the offer for the U.S. Market risk management ppt shareholders of Reynolds, even as it made the cash portion more costly for the UK company.
But one source likened the deal to simplifying Reynolds’s structure by removing the stake it does not own. Market risk analyst salary singapore “It’s always been on the cards,” he said.
After the Brexit vote, shares in BAT soared to all-time highs as investors bet the falling pound would lift the value of overseas revenue. Global solutions network BAT, whose share appreciation is less pronounced in dollar terms, does the vast majority of its business outside the country. Us market risk premium It has over 200 brands in over 200 markets.
With little geographic overlap and therefore limited antitrust issues, this deal is also a lot simpler than another oft-speculated deal – that BAT would take over British rival Imperial Brands , the source added.
Imperial shares were up 2 percent on Friday, with one analyst saying a general reignition of consolidation in the industry may be outweighing the fact that BAT is now unlikely to bid for its rival in the near term.
Altria Group shares were up 4 percent in New York, boosted by hopes that an enlarged BAT would push Swiss-based market leader Philip Morris International to reunite with the U.S. Market liquidity risk management company. Market risk jobs singapore The Marlboro maker split into two in 2008, when the risk of litigation in the United States was seen as a deterrent to foreign companies.
Reynolds, based in Winston-Salem, North Carolina, acknowledged receipt of the unsolicited offer. Market risk in banks This was made public immediately after BAT’s approach to the Reynolds board, as required by U.S. Global solutions group securities regulators in cases where the buyer is a big shareholder.
The British group said its offer valued Reynolds’s shares at $56.50, of which $24.13 would be in cash and $32.37 would be in BAT shares, representing a premium of 20 percent over the closing price of Reynolds stock on Thursday. Managing the risks of organizational accidents On Friday afternoon Reynolds shares, at $53.73, were below the offer price.
Wells Fargo analyst Bonnie Herzog said she expected Reynolds to push for a higher price than the $47 billion BAT is offering for the remaining 57.8 percent of the company. Market risk management in banks ppt Under the offer, $20 billion would be in cash and $27 billion in BAT shares.
One source estimated that BAT valued Reynolds’s shares at 16.3 times earnings before interest, tax, depreciation and amortization (EBITDA), higher than what Reynolds paid for Lorillard.
BAT Chief Executive Nicandro Durante, a long-distance runner who hails from Sao Paolo, Brazil, said the deal would create a U.S. Global solutions market leader and the world’s largest listed tobacco company by net turnover and operating profit.
“The strategic rationale makes perfect sense,” Guy Ellison, an analyst at Investec Wealth & Investment, said. Definition of stock market He cited a BAT pivot toward the large U.S. Market risk reporting market – whose profit pool is protected by high barriers to entry – and improved scale in vapor products like e-cigarettes, which all big tobacco companies are investing in to offset declines in smoking.
BAT said the deal would add to earnings in the first year after closure and estimated cost savings of about $400 million. Risk in stock market It is contingent on approval from independent members of the Reynolds board who were not nominated by BAT.
The recent strength of BAT’s share price is also due to geopolitical uncertainty leading investors to seek out stable, dividend-yielding stocks like tobacco and other consumer staples.
Shares in Reynolds fell to a 12-month low on Wednesday of $43.38 after its third quarter earnings were 6 percent short of market forecasts, Jefferies analysts said, on the back of a 1.5 percent fall in domestic cigarette volumes.
If successful, the takeover would be one of the biggest this year globally. Var market risk Including debt, this would be the largest UK outbound M&A deal this year and the fourth largest of all-time, according to Reuters data.
BAT stopped operating in the United States in 2004, when it merged its U.S. Market risk in banks ppt subsidiary Brown & Williamson with R.J. Hotel risk management jobs Reynolds to form Reynolds American.
Due to a series of high-profile U.S. Market risk analyst jobs south africa lawsuits against tobacco firms, the big four have all limited their exposure to the market. Equity risk premium calculator Yet several cases have now been settled, which has led analysts to speculate that international players could return.
Imperial Brands waded into the U.S. Managing market risk market last year with its $7 billion purchase of certain brands from Reynolds to ease the $25 billion purchase of Lorillard.
Smoking rates in the United States and other western markets are declining due to increasing health consciousness, and greater regulation and taxes. Market risk ppt Yet their addictive nature and high profit margins make them a profitable business.
BAT also said on Friday it had performed well in the first nine months of the year, raising both revenue at constant rates of exchange and cigarette volumes.
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