The proposed deal would see BAT, which currently holds a 42.2 per cent stake in Reynolds, purchase all remaining shares in the company for a staggering £38bn. At $56.60 per Reynolds share including $24.13 in cash and $32.37 in shares, the merger offer reflects a 20 per cent premium on Reynold’s closing share price on the New York Stock Exchange at the tail end of last week, which valued the entire company at around £66bn. Meanwhile, BAT has estimated that it could bank around $400m (£328m) worth of cost-savings through the merger. Together, BAT and Reynolds would create a global tobacco giant with a combined value around £157bn.

Firms appointed

BAT appointed a team of lawyers from Cravath, Swaine & Moore to advise on the US law aspects of its offer, receiving advice from a team led by corporate partners Philip Gelston, David Perkins, Ting Chen and Alyssa Caples. Meanwhile, the company turned to longstanding UK-based advisers Herbert Smith Freehills to handle English law elements of the merger offer. The team from HSF has been headed by senior partner James Palmer, corporate partners Gillian Fairfield and Alex Kay, and tax partner Isaac Zailer. As the BAT offer to Reynolds is only an approach, the companies have not yet begun negotiating on the offer and Reynolds is yet to appoint legal advisers.

Sources: The Guardian; BBC; The Lawyer; Legal Business