Lorillard Involved in Potnetial Acquisiton Deal with Reynolds

According to a reporter at Reuters, there are talks to buyout Lorillard LO, a cigarette company which specializes in Menthol cigarettes. The financial times also has reason to believe that the cigarette giant could be bought out for a staggering $20 billion. The company’s stock is currently down $1.75 per share or 3.17 percent; the stock has steadily bee moving higher being up nearly 12 percent just this week alone

The reporter also reported that it is Reynolds American RAI who might be the suitor of the company. Reynolds is most notably known for its Camel cigarettes, which controls approximately 27 percent of the United States tobacco market share. While Reynolds controls 27 percent, Lorillard controls 15 percent, which would bring Reynolds total to 41 percent. Obviously, too much control is bad for everyone, so many have said that this may attract antitrust regulators.

To take it a step further, British American Tobacco a leading tobacco provider, would need to approve of this acquisition as it owns nearly 42 percent of Reynolds American.

A couple of years ago AT&T T was rejected a merger between itself and T-Mobile PCS, a leading telecommunications provider, maybe regulators would try to stop this deal as well as it might just skyrocket cigarette prices in general.

Lorillard is expected to do an aggregate $5.3 billion in sales this year.