In 2010, Reynolds American's operating companies sold about 28% of all cigarettes sold in the U.S.[8] In July 2014, Reynolds American announced the purchase of Lorillard Tobacco Company in a deal valued at $27 billion. In January 2017, Reynolds American agreed to be purchased by British American Tobacco for $49.4 billion.[9]
History
Reynolds American was formed in January 2004[10] and began trading publicly on the New York Stock Exchange as RAI in August 2004.[7]
In July 2004, the U.S. business of British American Tobacco (Batus Inc. and Brown & Williamson) combined with that of R. J. Reynolds Tobacco Company (R. J. Reynolds), under the "R. J. Reynolds" name. RJR and Brown & Williamson were the second and third-ranking U.S. tobacco companies prior to the combination. After combination, R. J. Reynolds became a subsidiary of Reynolds American, with BAT holding a 42% share of RAI.[10] Santa Fe Natural Tobacco Company, which manufactures the additive-free Natural American Spirit brand of tobacco products, also became a subsidiary of Reynolds American at that time.[10]
Prior to becoming RAI operating companies, both R. J. Reynolds and Santa Fe were part of R. J. Reynolds Tobacco Holdings, Inc., which traded on the New York Stock Exchange as RJR. RJR became a subsidiary of RAI in July 2004.[10] R. J. Reynolds was established as a tobacco company in Winston-Salem, North Carolina in 1875.[11]
In 2006, Reynolds American expanded into the smokeless tobacco category, with the acquisition of Conwood, the second-biggest smokeless tobacco company in the United States. Conwood manufactures and markets moist and dry snuff, loose leaf, plug, and twist chewing tobaccos. At the time of the acquisition, 70% of Conwood's sales came from the growing moist-snuff segment, with the Grizzly brand showing the fastest growth.[12] Grizzly's continued growth since 2006 has made it the best-selling brand in the moist-snuff category.[13]
In 2008, RAI was recognized as a leader in corporate sustainability by being added to the membership in the 2008-2009 Dow Jones Sustainability North America Index (DJSI North American). RAI is the only U.S. tobacco company and one of 125 North American companies on the index.[14] Selection for the Index is based on performance in a number of economic, environmental and social criteria.[15]
Former Chairman, President and CEO of Reynolds Tobacco Daniel "Daan" Delen assumed the positions of President and CEO of Reynolds American on March 1, 2011,[18] after former president, CEO, and chairwoman Susan Ivey announced she would retire as chairwoman November 1, 2010 and as President and CEO effective February 28, 2011.[19]
Ivey, now known as Susan Cameron, returned as CEO in April 2014 after being elected by the board of directors.[20]
In July 2014, Reynolds American, Inc. announced it would buy Lorillard Tobacco Company for roughly $25 billion a result of slowed sales. The deal is valued at $27.4 billion, including debt.[21][22] Reynolds agreed to pay $68.88 in cash and stock for every Lorillard share and assume its debt.[23] The deal also included the sale of the Kool, Winston, Salem, and blu brands to Imperial for $7.1 billion.[24] The merger became official on June 12, 2015.[25]
On September 15, 2016, the former speaker of the US House, John Boehner, joined the board of Reynolds American.[26]
On October 21, 2016, British American Tobacco announced that it had offered to buy the remaining 57.8 percent of Reynolds American for $47 billion.[27] In January 2017, Reynolds American agreed to a $49.4 billion deal, expected to close in the third quarter of the year after approval from both companies' boards of directors.[9] The deal was completed July 25, 2017.[5]
On February 25, 2020, Chief Judge Rodney Gilstrap of the United States District for the Eastern District of Texas determined that Reynolds remained liable for its full portion of an annual $8 billion dollar settlement payment based on a settlement agreement that Reynolds reached with the State of Texas in 1998.[28] Reynolds had previously claimed that its divestiture of several brands to Imperial had extinguished its obligation to make payments for those brands under the 1998 Settlement Agreement. Chief Judge Gilstrap disagreed in a 92-page memorandum opinion and order, finding that Reynolds' position was "oppressive, inequitable, and unreasonable" in addition to being contrary to governing law.[29]
Related Research Articles
Altria Group, Inc. is an American corporation and one of the world's largest producers and marketers of tobacco, cigarettes, and related products. It operates worldwide and is headquartered in Henrico County, Virginia, just outside the city of Richmond.
The R. J. Reynolds Tobacco Company (RJR) is an American tobacco manufacturing company based in Winston-Salem, North Carolina, and headquartered at the RJR Plaza Building. Founded by R. J. Reynolds in 1875, it is the second-largest tobacco company in the United States. The company is a wholly owned subsidiary of Reynolds American, after merging with the U.S. operations of British American Tobacco in 2004.
Premier was an American brand of smokeless cigarettes which was owned and manufactured by the R.J. Reynolds Tobacco Company (RJR). Premier was released in the United States in 1988. It was the first commercial heated tobacco product. However, it was difficult to use and tasted unpleasant; as a result, it was unpopular with consumers. A commercial failure, the brand was a significant financial loss for RJR and was quickly taken off the market.
R. J. Reynolds Nabisco, Inc., doing business as RJR Nabisco, was an American conglomerate, selling tobacco and food products, headquartered in the Calyon Building in Midtown Manhattan, New York City. R. J. Reynolds Nabisco stopped operating as a single entity in 1999. Both RJR and Nabisco still exist.
British American Tobacco plc (BAT) is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products. The company, established in 1902, is headquartered in London, England. As of 2021, it is the largest tobacco company in the world based on net sales.
Brown & Williamson Tobacco Corporation was a U.S. tobacco company and a subsidiary of multinational British American Tobacco that produced several popular cigarette brands. It became infamous as the focus of investigations for chemically enhancing the addictiveness of cigarettes. Its former vice-president of research and development, Jeffrey Wigand, was the whistleblower in an investigation conducted by CBS news program 60 Minutes, an event that was dramatized in the film The Insider (1999). Wigand claimed that B&W had introduced chemicals such as ammonia into cigarettes to increase nicotine delivery and increase addictiveness.
Imperial Brands plc is a British multinational tobacco company headquartered in London and Bristol, England. It is the world's fourth-largest international cigarette company measured by market share after Philip Morris International, British American Tobacco and Japan Tobacco and the world's largest producer of fine-cut tobacco and tobacco papers.
Swedish Match AB is a Swedish multinational tobacco company headquartered in Stockholm. The company manufactures snus, nicotine pouches, moist snuff, tobacco- and nicotine-free pouch products, chewing tobacco, chew bags, tobacco bits, cigars, matches, and lighters, with operations in Sweden, Denmark, the United States, the Dominican Republic, Brazil, the Netherlands, and the Philippines. The company's origins can be traced back to 1868, and Ivar Kreuger. Swedish Match has played an important part in Sweden's industrial development.
Salem is an American brand of cigarettes, currently owned and manufactured by ITG Brands, a subsidiary of Imperial Tobacco, inside the U.S. and by Japan Tobacco outside the United States.
U.S. Smokeless Tobacco Company is an American company that manufactures smokeless tobacco products, notably dipping tobacco, as well as chewing tobacco, snus, and dry snuff. The company is a subsidiary of Altria.
Lorillard Tobacco Company was an American tobacco company that marketed cigarettes under the brand names Newport, Maverick, Old Gold, Kent, True, Satin, and Max. The company had two operating segments: cigarettes and electronic cigarettes.
Doral is an American brand of cigarettes, currently owned and manufactured by the R.J. Reynolds Tobacco Company.
Winston is an American brand of cigarettes, currently owned and manufactured by ITG Brands, subsidiary of Imperial Tobacco in the United States and by Japan Tobacco outside the U.S. The brand is named after the town where R. J. Reynolds started his business which is Winston-Salem, North Carolina. As of 2017, Winston has the seventh-highest U.S. market share of all cigarette brands, according to the Centers for Disease Control and Prevention and the Maxwell Report.
The American Snuff Company, formerly Conwood Sales Company LLC, is a US tobacco manufacturing company that makes a variety of smokeless tobacco products, including dipping tobacco or moist snuff, chewing tobacco in the forms of loose-leaf, plug, and twist, and dry snuff.
Susan M. Cameron is an American businessperson who is the former chairman, president, and CEO of Reynolds American, Inc.
Dissolvable tobacco is a tobacco product that dissolves in the mouth. Major tobacco manufacturers that sell dissolvable tobacco products include R. J. Reynolds Tobacco Company. Research into health effects of dissolvable and other new tobacco products was among the reasons of the establishment of the Tobacco Products Scientific Advisory Committee of the Food and Drug Administration in 2009.
The RJR Plaza Building is a 16-story skyscraper in Winston-Salem, North Carolina which was completed in 1982 for R. J. Reynolds Tobacco Company, currently the second-largest tobacco manufacturer in the United States. In 2009, the RJR Plaza building became the headquarters for both Reynolds Tobacco and its parent company Reynolds American after Reynolds decided in 2008 to vacate its longtime headquarters, the Reynolds Building.
Maverick, is an American brand of cigarettes, currently owned and manufactured by ITG Brands, a subsidiary of Imperial Tobacco.
R. J. Reynolds Vapor Company is an American electronic cigarette company based in Winston-Salem, North Carolina.
ITG Brands, LLC is the third-largest American tobacco manufacturing company in the United States. It is a subsidiary of British multinational Imperial Brands. ITG Brands markets and sells multiple cigarette and cigar brands and sells blu eCigs. The company was created in 2015 and has its production, headquarters, and regulatory compliance facilities located in Greensboro, North Carolina.
↑ "Sustainability Leaders"(PDF). Dow Jones Sustainability Indexes. SAM Indexes GmbH. 3 March 2009. Archived from the original(PDF) on 16 July 2011. Retrieved 6 July 2009.
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US$ 8.236 billion (2013) [2] 
US$ 3.132 billion (2013) [2] 
