WINSTON-SALEM, N.C., July 9 (UPI) -- R.J. Reynolds and Brown & Williamson, the nation's No. 2 and 3 tobacco companies, were reported Wednesday to be talking merger.
The two companies, squeezed between brutal price competition from deep-discount brands and an aggressive marketing push by Marlboro maker Phillip Morris, have been discussing combining U.S. operations in a series of meetings but a deal seems far from imminent, the Wall Street Journal said.
Under one scenario that RJR has proposed, the Winston-Salem, N.C., maker of iconic brands Camel and Winston, would acquire Brown & Williamson, a unit of British American Tobacco, in a stock transaction. Should such a deal occur, London-based BAT would become a major shareholder in RJR, allowing it to indirectly maintain a sizable position in the U.S. market.
The situation is fluid, and in the past, people close to the situation said, BAT executives have proposed that BAT -- owner of Lucky Strike, Pall Mall, Dunhill and Kent -- acquire RJR instead.