Imperial Tobacco Group Plc’ share price up, negotiates the acquisition of Reynolds-Lorillard assets

Imperial Tobacco Group Plc, which is the fourth-biggest cigarette producer in the world, made a statement that it is currently having talks with Reynolds American Inc. and Lorillard Inc. over the acquisition of brands that are property of the two U.S. tobacco companies in the event of a merger between them.

As reported by the Wall Street Journal, the U.K.-based company described the U.S. market as “one of the worlds largest and most profitable cigarette markets”. Imperial Tobacco Group Plc refused to disclose any further financial terms of the eventual acquisition, but shared that there was no certainty about the completion of the deal.

According to the statement, which was cited by Bloomberg, the company said that it would proceed with the deal only in case that the terms met its “strict transaction criteria”. “There can be no certainty as to the terms upon which any acquisition or related debt financing may be agreed or whether any transaction will take place,” the statement read.

People familiar with the process reported that the company is preparing about 7 billion dollars in order to purchase some of the brands owned by Lorillard and Reynolds.

The two U.S. companies were having negotiations and are expected to officially announce a merger as soon as next week. People with knowledge of the matter also revealed that the merger was approved by British American Tobacco Plc.

Imperial Tobacco Group Plc was adding 1.88% to trade at 2,709 pence per share by 13:36 GMT, marking a one year change of +19.18%. According to information published on the Financial Times, the 16 analysts offering 12-month price targets for Imperial Tobacco Group Plc have a median target of 2,630, with a high estimate of 3,000 and a low estimate of 1,900. The median estimate represents a -1.09% decrease from the last price of 2,659.