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Reynolds American, Inc. (RAI)

  • Thu, Apr. 2, 5:50 PM
    • The WSJ reports the FTC is "considering possible settlement terms" that would allow Reynolds (NYSE:RAI) to go through with its $25B acquisition of Lorillard (NYSE:LO).
    • Some FTC staffers have reportedly raised objections to a deal, which would combine the country's #2 and #3 cigarette makers (trailing Altria). But "other key figures within the commission believe the better approach would be to approve the merger with a binding legal settlement that includes divestitures."
    • As it is, Reynolds/Lorillard have agreed to sell a slew of assets to Imperial Tobacco for $7.1B. The WSJ states it "isn't clear" if the FTC might want concessions beyond the Imperial deal.
    • Shares of both companies rallied in regular trading ahead of the report, amidst a meeting with the FTC: Reynolds rose 4.4%, and Lorillard rose 2.8%.
    | Thu, Apr. 2, 5:50 PM | Comment!
  • Thu, Apr. 2, 1:10 PM
    • Shares of Reynolds American (RAI +3.7%) and Lorillard (LO +3%) trade higher with the company still meeting with the FTC.
    • Analysts now expect the deal to be approved by regulators after some reports earlier this week leaned in the opposite direction.
    | Thu, Apr. 2, 1:10 PM | 2 Comments
  • Mon, Mar. 30, 2:31 AM
    • Following months of regulatory examination, Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) are expected to meet this week with members of the Federal Trade Commission ahead of a final decision by the agency on whether to allow the companies to merge.
    • When the two U.S. cigarette makers announced their $25B deal last July, they sought to address potential regulatory concerns about competition by selling $7.1B in brands and other assets to Imperial Tobacco (OTCQX:ITYBY).
    | Mon, Mar. 30, 2:31 AM | 1 Comment
  • Mon, Mar. 23, 11:40 AM
    • Big Tobacco is pushing for tighter regulations on e-cigarettes in a move some say is a clever strategy to keep out smaller players, according to Reuters.
    • The push from established industry players include calls to regulate vape shops.
    • Larger tobacco companies will benefit with their own e-cig brands if independent shops have increased barriers to entry and large retail chains are forced to display the product category behind counters.
    • E-cigarette sales in the U.S. decelerated to 5% growth in Q4.
    | Mon, Mar. 23, 11:40 AM | 15 Comments
  • Mon, Mar. 23, 8:09 AM
    • Cash is still king in the tobacco industry.
    • Despite a wave of worry over global plain-packaging laws on cigarettes, shares of tobacco companies continue to offer solid returns for shareholders due in part to vibrant free cash flow.
    • Pricing has also held up in the sector even with volume in decline.
    • In some regions taxes as a percentage of price has decreased which is a boost to profit margins in the sector.
    • Another factor in the industry is the "massive" barriers erected by regulators that have ended up to act a wide moat for some global companies.
    | Mon, Mar. 23, 8:09 AM | 7 Comments
  • Tue, Mar. 17, 10:25 AM
    • Cowen Research notes the increase in the 10-year Treasury yield has been a factor with U.S. tobacco stocks.
    • Low interest rates have been an ongoing positive factor for the dividend-lush tobacco sector.
    • On watch: Reynolds American (RAI -0.9%), Lorillard (LO -0.5%), Altrai (MO -0.7%), Vector Group (VGR +0.6%).
    | Tue, Mar. 17, 10:25 AM | 17 Comments
  • Fri, Mar. 13, 5:55 PM
    • Antitrust enforcers are asking detailed questions about business plans and leadership of a third company that plays a key role in Reynolds American’s (NYSE:RAI) proposed acquisition of Lorillard (NYSE:LO), WSJ reports.
    • RAI and LO have sought to head off antitrust concerns by selling $7.1B in cigarette brands and other assets to U.K.-based Imperial Tobacco (OTCQX:ITYBY, OTCPK:ITYBF); the intent was to give Imperial a significant U.S. presence that could replace market competition previously provided by LO.
    • The FTC’s review of the merger, now in its latter stages, is said to be examining whether Imperial can become a significant player in the U.S. market if the merger is approved.
    | Fri, Mar. 13, 5:55 PM | 9 Comments
  • Thu, Mar. 12, 2:30 AM
    • The U.K. Parliament has voted to ban branding on cigarette packs as of 2016, under which cigarettes would be sold in uniform packs stripped of distinctive logos and colors, and adorned with graphic health warnings.
    • The move draws promises of legal challenge from the tobacco industry and raises the prospect of similar legislation in countries across Europe.
    • Previously: England to vote on cigarette pack branding ban (Mar. 11 2015)
    • Related stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, OTCPK:JAPAY, BTI
    | Thu, Mar. 12, 2:30 AM | 27 Comments
  • Wed, Mar. 11, 5:41 AM
    • Lawmakers in the lower house of Britain's parliament are expected to vote to ban branding on cigarette packs by a large margin later today, in a move that would force tobacco firms to adopt plain packets in England by 2016.
    • The measure, which was passed in Australia two years ago, has manufacturers' worried, as it will likely crimp profits and may spread to additional countries.
    • The tobacco industry has fiercely resisted the new law, arguing that the plain packs infringe on intellectual property rights.
    • Previously: England looks to ban branding on cigarette packs (Jan. 22 2015)
    • Related stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, BTI
    | Wed, Mar. 11, 5:41 AM | 27 Comments
  • Tue, Mar. 10, 1:08 PM
    • Regulatory review on the pending merger between Reynolds American (NYSE:RAI) Lorillard (NYSE:LO) will hinge on the Newport menthol brand, according to analysis.
    • A survey of retailers by Wells Fargo showed a strong sense that Newport will be approved to be part of the Reynolds Every Day Low Price program which could help sales grow.
    • Reynolds could also flex its muscles with retailers if Newport is part of the program.
    • The addition of Newport to EDLP could squeeze out some newly-added Imperial Tobacco (OTCQX:ITYBY, OTCPK:ITYBF) brands such as Kool, Salem, Winston, and Maverick.
    | Tue, Mar. 10, 1:08 PM | Comment!
  • Wed, Feb. 25, 5:45 PM
    • The three largest U.S. tobacco companies - Altria (NYSE:MO), Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) - agree to pay a combined $100M to settle hundreds of pending federal lawsuits in Florida, resolving some but not all of the legal uncertainty that has hung over the industry since a class-action lawsuit was brought by state residents in 1994.
    • The settlement is far less than the $500M-plus the industry has had to pay winning plaintiffs in Florida over the past decade, but it leaves unresolved more than 3,000 cases pending in state courts, cases that are bigger and more potentially damaging.
    • MO and RAI each will pay $42.5M to resolve ~400 federal cases, and LO will pay $15M.
    | Wed, Feb. 25, 5:45 PM | 6 Comments
  • Wed, Feb. 25, 9:56 AM
    • Lorillard (LO +0.1%) and Reynolds American (RAI +0.3%) have entered into a tentative agreement in the Engle progeny class action cases circulating around in federal courts.
    • Lorillard says it will pay $15M to resolve the issue.
    • Reynolds American will make a payment of $42.5M.
    | Wed, Feb. 25, 9:56 AM | Comment!
  • Tue, Feb. 10, 9:27 AM
    • Reynolds American (NYSE:RAI) reports cigarette volume fell 4.9% to 14.9B in Q4 vs. the -2.0% industry average.
    • Cigarette market share -30 bps to 26.4%.
    • Premium mix +80 bps to 58.4%.
    • SG&A expenses +91% Y/Y to $703M (Vuse investment).
    • Guidance from the company was in-line expectations going into the company's merger with Lorillard.
    • RAI +1.5% premarket.
    | Tue, Feb. 10, 9:27 AM | Comment!
  • Tue, Feb. 10, 7:13 AM
    • Reynolds American (NYSE:RAI): Q4 EPS of $0.87 in-line.
    • Revenue of $2.13B (+4.4% Y/Y) in-line.
    • Press Release
    | Tue, Feb. 10, 7:13 AM | Comment!
  • Mon, Feb. 9, 5:30 PM
  • Wed, Jan. 28, 9:44 AM
    • Shareholders with Reynolds American (RAI +1.5%) have approved an issuance of shares in connection with the company's acquisition of Lorillard (LO +0.8%).
    • The merger is still subject to regulatory approval.
    • The company expects a closing in the first half of 2015.
    • Reynolds American merger update (.pdf)
    | Wed, Jan. 28, 9:44 AM | 2 Comments
Company Description
Reynolds American Inc, through its subsidiaries, manufactures cigarettes and other tobacco products in the United States. The products brand include CAMEL, PALL MALL, WINSTON, among others.
Industry: Cigarettes
Country: United States