Cape Town - British American Tobacco's (BAT's) [JSE:BTI] $49.4bn proposal to acquire rival Reynolds has been met with approval, a move that will make it the world's largest tobacco company.
The move comes after the maker of Camel rejected a $47bn bid by BAT in November 2016.
Reynolds, the company's former rival, is well positioned as the number two player in the US, presenting BAT an opportunity for direct access in the US market, according to a statement released on Tuesday.
Reynolds’ American Snuff subsidiary also has a 33% share of the growing moist snuff segment, led by its Grizzly brand.
BAT's track record of growing market share through its focus on product quality and innovation enables it to build on Reynolds’ existing share growth momentum, the company said.
"BAT has consistently executed a winning strategy and delivers strong results and returns for its shareholders while investing for future growth," added BAT CEO Nicandro Durante.
BAT said the move will bode well for its strategy for sustained long-term profit growth.
The company's shares were trading 0.76% down at R776.41 on the JSE at 14:45.