Will the FTC allow RJR and BAT to merge or will there be a lawsuit to block the proposed merger?
Friday June 25, 2004 at 5:00 PM EST is the deadline. It isn't the first deadline, and the FTC could ask for another extension.
Oct. 27, 2003 RJR and BAT Agree to Combine U.S. Assets and Operations.
Recent Press Releases from R.J.Reynolds Tobacco Holdings.
Vol. 1, No. 3 Jan. 22, 2004
Merger Documents filed with SEC
The filings necessary to secure regulatory and other approvals required to complete the merger of R.J. Reynolds Tobacco and Brown & Williamson continue on schedule.
On Friday, Jan. 16, Form S-4, a regulatory filing outlining the merger agreement between RJR and BAT to combine their U.S. tobacco operations, was filed with the Securities and Exchange Commission (SEC). The S-4 is the "registration" document required by the SEC for all proposed mergers that involve the issuance of stock in a public company. The filing includes pro forma financial measures of the two companies, information about the anticipated synergies the merger is expected to yield, and extensive background on the U.S. tobacco industry. The SEC has one month to review the S-4 and provide the companies any comments the agency has on the document. Once the 2003 financial statements for both companies are finalized and audited, they will be included in the S-4 through an amended filing.
A document similar to the final S-4 will be sent to RJR shareholders later this spring as part of the solicitation of their approval of the proposed merger. It is not certain at this time whether the special shareholder meeting to approve the proposed merger will be held in addition to or instead of RJR's regular annual shareholder meeting now scheduled for May 5.
Both RJR and B&W also continue to provide information to the Federal Trade Commission for their analysis of the proposed merger. As was expected, the FTC requested additional documents from both companies, and we are complying with those requests.
October 29, 2003 12:53 a.m. EST
Tobacco Merger To Give Top Job To Susan Ivey
By VANESSA O'CONNELL and DEBORAH BALL
Staff Reporters of THE WALL STREET JOURNAL
Since before the days when "LSMFT" (or Lucky Strike Means Fine Tobacco) was a famous ad slogan, Brown & Williamson Tobacco Corp., which also markets Kool and Pall Mall, has been a well-known name. But as a result of Monday's announcement that R.J. Reynolds Tobacco Holdings will acquire Brown & Williamson, the name will effectively be retired and the company subsumed into a new entity, Reynolds American Inc. B&W's headquarters in Louisville, Ky., will also be shut down.
But Brown & Williamson will live on in the person of 44-year-old Susan Ivey, who will become chief executive of the merged companies. And if the management plan stays on track, six months later, when RJR's Andrew Schindler moves from executive chairman to nonexecutive chairman, she will become the leader of the second-largest tobacco company in the U.S.
Ms. Ivey will be entering the hard-charging culture of RJR, whose shareholders will initially own 58% of Reynolds American. British American Tobacco PLC, B&W's parent since 1927, will own the rest. "I am excited about the deal because I really do think . . . the new company has the potential to be stronger than either of us individually," Ms. Ivey said in an interview Tuesday.
In recent years, RJR has remained fiercely unrepentant as cigarette makers have come under fire. Brown & Williamson, by contrast, claims to have been the first tobacco company to publicly acknowledge the dangers of smoking, on its Web site in 1997. Meanwhile, Altria Group Inc.'s Philip Morris USA has taken the lead in trying to find common ground with antismoking advocates, and the maker of Marlboros now dominates the U.S. market. RJR and B&W came together not just to fight the many outside threats to the tobacco industry -- including litigation, high taxes and smoking bans -- but also to stand up to Philip Morris on the one hand and deep-discount competitors on the other.
"The two companies seem to have significant cultural differences," says Blake Brown, professor of agricultural economics at North Carolina State University. "British American Tobacco is an international company that's known as fairly progressive. RJR has endured a series of difficult mergers and spinoffs, after which it decided to focus on the U.S."
The executive entrusted with bringing off this union is one of a handful of women to rise to the top in an especially male-oriented business. After graduating from the University of Florida, Ms. Ivey moved to Louisville and started working at an office-equipment company, taking business-school classes at night and on weekends. She wanted to go into sales and considered three areas: cigarettes (she smokes ultra-light menthols), alcohol (wine and champagne) and cosmetics. "I said to myself, 'I would like to do something I like,' " she says.
In 1981, Brown & Williamson had just launched its Barclay menthol brand. Ms. Ivey liked the cigarettes, but when she went to a store to buy more, they were out of stock. She called the company to inform them of the distribution blunder. Within a week she had a job there, she says.
Ms. Ivey rose through the ranks in sales and marketing, first at Brown & Williamson, then at its London-based parent. From 1994 to 1996, she was based in Hong Kong as director of marketing for China, then relocated to London as the head of British American Tobacco's international brands. She engineered the relaunch of some key brands, such as Lucky Strike in the European markets, and State Express 555 for the Asia-Pacific region. She changed packaging, marketing and price points, which helped push up product market share. In 2000 she returned to Louisville as a senior marketing executive. And by January 2001, she was Brown & Williamson's president and chief executive.
The company's market share was slipping, to 10.6% today from 15% in 1998, but Ms. Ivey slowed the attrition. The large tobacco lawsuit settlement with state attorneys general that year prompted the major tobacco companies to raise their prices while forcing them to abide by new marketing restrictions. Ms. Ivey responded by slashing the marketing budget of GPC, a discount brand, reasoning that it couldn't compete with a new breed of deep-discount brands.
She then oversaw the switch to an "everyday low-price" strategy for GPC and Viceroy to undercut competitors' premium brands and cut down on costly rebates and incentives. "The company's sales force would be able to hit 10 stores a day rather than five stores a day," because they didn't have to waste time figuring out the retailer discount, she says. In early 2001, she successfully relaunched Pall Mall filtered cigarettes in the U.S.
Ms. Ivey spent much of Tuesday meeting with employees in Louisville, where job cuts are expected. The two companies aim to save at least $500 million annually. "Certainly as we integrate these companies there will be layoffs," she says. The current plan is to close Brown & Williamson's only manufacturing plant, in Macon, Ga.
Headquarters will be relocated to Winston-Salem. Ms. Ivey says she's never been there.