Business & Economy
11:26 am
Tue July 15, 2014

Two North Carolina-Based Tobacco Giants To Merge

Lorillard's major brands
Lorillard's major brands
Credit Lorillard

America's second and third-largest tobacco companies have announced the terms of a potential merger. Reynolds American Inc. will buy Lorillard for $27.4 billion. The Newport cigarette brand will follow Lorillard to Reynolds, where it will join Camel and Pall Mall, and VUSE (Reynold's e-cigarette brand).

Reynolds is based in Winston Salem, NC. Lorillard is located in Greensboro.

The New York Times reports that "the long-awaited combination, over a year in the making, will reshape America’s tobacco industry as companies grapple with a decades-long drop-off in smoking."

CNBC reports that the deal is possible now because "the threat of devastating litigation against tobacco companies has waned over the last decade, analysts say. While litigation continues, the number of cases has shrunk, and companies have proven that the legal expenses are manageable."