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RAI to acquire Lorillard, sell brands to Imperial

| July 15, 2014

Reynolds American Inc. (RAI) will acquire Lorillard for $27.4 billion. To help ease antitrust scrutiny that the deal may face, Imperial Tobacco has agreed to purchase the Kool, Salem, Winston, Maverick and Blu Ecigs brands for $7.1 billion, more than tripling its share of the U.S. cigarette market. Imperial will also acquire Lorillard’s manufacturing and R&D facilities in Greensboro, North Carolina and approximately 2,900 employees, including a national sales force.

Reynolds expects to have more than $11 billion in revenue and about $5 billion in operating income after the deal. RAI’s largest shareholder, British American Tobacco, supports the transaction and will maintain its 42 percent ownership in RAI through an investment of approximately $4.7 billion.

In addition, RAI and BAT have agreed in principle to pursue an ongoing technology-sharing initiative for the development and commercialization of “next-generation” tobacco products, including heat-not-burn cigarettes and vapor products.

Susan Cameron will continue as RAI’s president and CEO after completion of the deal. The company will remain headquartered in Winston-Salem. Murray Kessler, chairman, president and CEO of Lorillard, will join RAI’s board after the closing of the transaction.

“Reynolds American and Lorillard have complementary core strengths and the addition of Newport to our operating companies’ existing brand portfolios will enhance our ability to compete in the combustible cigarette and smokeless categories,” said Cameron. “We are also confident in R.J. Reynolds Vapor Co.’s digital vapor cigarette Vuse, which offers superior technology and has received very positive early results in its national rollout. This transaction will provide RAI with additional resources to invest in innovation, R&D and its operating companies’ brands.”

“We are proud of Lorillard’s record of shareholder value creation and operational success, and we view this transaction, which provides a significant premium to our shareholders, as the culmination of our efforts,” said Kessler.

“We are confident in the strategic and financial merits of these transactions,” said Nicandro Durante, CEO of BAT. “Additionally, we find the long-term prospects of this combination compelling, which is why we are making an additional investment in Reynolds American.”

Second global nicotine forum scheduled

| July 15, 2014

The organizers of the recently held Global Forum on Nicotine have announced that they will stage another such event in a year’s time.

The second Global Forum on Nicotine is scheduled to take place at the Marriott Hotel, Warsaw, on June 5–6, 2015.

The first GFN, which attracted about 200 people from 30 countries, was organized by U.K.-based Knowledge-Action-Change, whose co-director, Gerry Stimson, is professor emeritus at the London School of Tropical Medicine and Hygiene.

It was held on June 27–28, also at the Marriott Hotel, Warsaw, where participants included scientists, researchers, representatives of tobacco- and e-cigarette manufacturers, vaper activists, at least one politician and tobacco control advocates.

Lung groups criticized over position statement on e-cigarettes

| July 15, 2014

A position statement on e-cigarettes issued last week by a group of international lung health organizations has been strongly criticized by a leading U.S. health expert.

“Experts from the world’s leading lung organizations have released a position statement on electronic cigarettes, focusing on their potential adverse effects on human health and calling on governments to ban or restrict their use until their health impacts are better known,” according to a press note from the American College of Chest Physicians.

The position statement was issued by the Forum of International Respiratory Societies.

On his blog site, The rest of the story: Tobacco news analysis and commentary, Dr. Michael Siegel, a professor in the Department of Community Health Sciences, Boston University School of Public Health, said that in contrast to their position on e-cigarettes, the organizations did not express any problem with tobacco cigarettes remaining on the market. This was despite the fact that tobacco cigarettes each year killed millions of people worldwide, while e-cigarettes were not known to have killed a single person ever.

Siegel said the position statement had to be one of the most disgraceful moves of the year by any medical or public health group.

“Even the multinational tobacco companies do not have the gall to promote a ban on electronic cigarettes so that their deadly tobacco cigarettes will not be threatened by this potentially substantial competition,” he wrote on Friday. “In fact, the position of these supposed lung health groups is far more extreme than any Big Tobacco position, as the tobacco companies have entered the e-cigarette business and are not using their lobbying power to try to remove these products from the market.”

The full blog is at http://tobaccoanalysis.blogspot.co.uk/2014/07/disgrace-of-year-leading-lung-health.html.

Denmark referred to court over failure to ban less risky tobacco product

| July 15, 2014

The European Commission on Thursday referred Denmark to the EU Court of Justice (CJEU) for not banning all forms of snus.

With the exception of Sweden, the sale of snus is prohibited throughout the EU.

The commission said that it was referring Denmark to the CJEU for failure to amend its national legislation so as to ban all forms of snus.

It said it had asked Denmark on Oct. 25, 2012, to take all necessary steps to comply with the relevant directive (2001/37/EC) and to inform it about the adopted national legislation within two months.

“Until now, Denmark has not notified any such measures to the commission and continues to be in breach of EU law,” the commission said.

The commission is acting on this infringement despite the fact that many people believe the use of snus is hugely less risky than smoking and despite the fact that it remains legal to sell cigarettes throughout the EU.

In Sweden, the only EU member state where it is legal to sell snus, the incidence of smoking among men and the level of tobacco-related cancers have dropped significantly as snus use has increased.

Cigarette sales plummet during Ramadan

| July 15, 2014

With the Islamic fasting month of Ramadan midway over, shops in Oman’s capital, Muscat, are experiencing a drop in cigarette sales of up to 45 percent, according to a story in the Oman Observer.

And the pattern of sales is different, with few sales being made during the day but a rush occurring after iftar, the breaking of the fast.

Smoking in public during the day is a punishable offence in the country, but it is generally only the sale of cigarettes that is reduced.

Sales of premium cigars, which are consumed mostly by Europeans, are not affected.

And the café shisha business is little affected because most customers visit these venues at night.

New longer-lasting e-cigarette on offer

| July 15, 2014

FirstUnion says it has used new battery materials and a different internal structure to develop a more economical, longer-lasting, disposable e-cigarette that yields high puff counts, “immense vapor” and a fresher taste using a safer battery.

The new design is said also to allow for a longer shelf-life.

The new battery materials were said by FirstUnion in a press note issued through PRNewswire to have been developed with its suppliers.

And the battery is such that it can deliver “ultra-thick” vapor even under conditions of low voltage.

FirstUnion Group, which describes itself as the largest solutions provider for e-cigarettes in the world and is based in Shenzhen, Guangdong, China, says that it has applied for patents on its leak-proof design.

“There is an unprecedented and new high-tech comprehensive thermal structure solution hidden under a regular appearance,” the company said of its product.

“We can proudly announce to the world that this new technology can change the world,” it added.

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