Reynolds American and Lorillard would be on the verge of merging, creating the world number two in the tobacco sector, behind the Atria Group. In fact, Reynolds owns the Camel and Pall brands while Lorillard occupies a leading position within the market for menthol cigarettes, but above all for low-cost electronic cigarettes, a business of almost 2 billion dollars in the United States.
For both groups, a possible merger would represent a decisive step forward towards consolidation on the market. Reyolds American needs to explore the e-cigarette business more strongly, while Lorillard risks having to reinvent itself, given the risk of the FDA banning menthol cigarettes.
The two companies have already started exclusive negotiations, even if nothing is defined at the moment.
