US tobacco giant Reynolds American has said its chief executive will remain at the company after its planned $49.4bn merger with British American Tobacco goes ahead.
The North Carolina-based company said Debra Crew would stay on as president and chief executive and report to BAT’s chief Nicandro Durante.
However Andrew Gilchrist, chief financial officer at the US business, will leave the enlarged entity once the merger completes. A search for his successor is under way.
The tie-up between the two groups is expected to create the largest listed tobacco company in the world.
BAT already owns 42pc of Reynolds. Mr Durante said taking full control of the company was a natural move that was triggered by BAT and Reynolds’ share price-to-earnings ratios reaching near parity in the last three years.
BAT chief executive Nicandro Durante
While BAT wants to continue expanding in emerging markets, it is keen to use its increased scale to target more of the profitable American market.
Reynolds, which is the second-largest tobacco company in the US, has a market share of more than a third having bought another US rival, Lorillard, two years ago. As part of that takeover, BAT invested $4.7bn in Reynolds so that it could maintain an existing 42pc stake in the US company.
Ms Crew said most of Reynolds’ executive team would remain at the business after the deal to help it achieve its aim of “transforming the US tobacco industry”. The company, in common with its peers, is also taking a close interest in new smoking products such as e-cigarettes.
Reynolds’ executive vice president of consumer marketing for its tobacco division Cressida Lozano has also said she will leave the group after the merger.
Frontpage September 5, 2018