Imperial Tobacco to buy US cigarette brands

(Shutterstock)
(Shutterstock)

London - Imperial Tobacco Group plans to buy US cigarette brands including Winston and Kool for $7.1bn as part of Reynolds American's $27.4bn purchase of Lorillard.

Imperial's purchase, meant to ease antitrust concerns from the marriage of the United States' No. 2 and No. 3 tobacco firms, also includes Maverick, Salem and the international and US rights to the nation's leading e-cigarette brand, blu.

After adjusting for the present value of tax benefits, expected at $1.5bn, Imperial said the net price of $5.6bn implies a multiple of 6.9 times the brands' earnings before interest, tax, depreciation and amortisation.

Reynolds, maker of Camel cigarettes, agreed on Tuesday to buy Newport-maker Lorillard, for $68.88 per share, or $27.4bn.

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