Tobacco companies get extension on deal

LOUISVILLE, Ky., June 8 (UPI) -- Brown & Williamson Tobacco said Tuesday it had agreed with R.J. Reynolds Tobacco to grant the FTC's request of extension for review of their proposed merger.

The two cigarette manufacturers said they would not close the transaction prior 5 p.m. June 24 to complete their merger. The Federal Trade Commission requested the extension of the required waiting period, R.J. Reynolds said.

The proposed deal, first announced in October, calls for R.J. Reynolds to buy Brown & Williamson's U.S. cigarette unit and Lane Ltd., which distributes Dunhill tobacco and makes other products.

R.J. Reynolds would retain a 58 percent ownership stake in the new entity, to be called Reynolds American Inc., while BAT would hold 42 percent.

R.J. Reynolds is the nation's second-largest cigarette maker behind Altria Group, which owns Phillip Morris. Brown & Williamson, a unit of British American Tobacco is the third-largest U.S. tobacco company.