Federal Trade Commission Has More Questions About Reynolds Deal
The Federal Trade Commission is asking for more information about Reynolds American’s $25-billion takeover of Lorillard.
If approved, the deal would position Reynolds as a strong number two company in the tobacco market, following Altria Group, Incorporated. According to terms of the deal, Reynolds would buy Lorillard and then sell much of Lorillard’s brands to the British company Imperial Tobacco Group.
Reynolds spokesman David Howard says the trade commission’s request for more information didn’t come as a surprise.
“When you have a deal that involves four different companies and a lot of moving parts and pieces there are going to be questions that need to be asked, and that’s exactly what’s happening here," Howard said. "It’s a normal part of the regulatory review process.”
Howard would not disclose the nature of the FTC’s questions about the deal. The request was issued under an antitrust act, which may indicate the questions concern the competitiveness of the marketplace. Howard says he still expects the deal to close in the first half of 2015.