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NEW YORK - Aiming to be better prepared to weather an onslaught of potential discount brands and lawsuits, R.J. Reynolds Tobacco Co. and rival Brown & Williamson Tobacco Corp. will unite their U.S. operations in a $2.6 billion deal, Reuters reports.
The deal, announced late yesterday, vastly expands the reach of the two tobacco companies, which together produce about one of every three cigarettes smoked in the United States.
The merged operation will be called Reynolds American Inc., with about $10 billion in annual sales. R.J. Reynolds, makers of Camel, Winston, Salem, and Doral, joins Brown & Williamson's top brands, which include Kool, Lucky Strike, and Capri.
The combined company will still trail industry giant Philip Morris USA, whose market-leading Marlboro and other brands command about half the U.S. cigarette market.
The new company plans to consolidate headquarters and operations in Winston-Salem, N,C., RJR's current home. The merger will end Brown & Williamson's presence in Louisville, Ky., where it has been based since the late 1920s.
B&W's 460 employees in Louisville will either lose their jobs or be offered transfers to North Carolina, according to a company spokesman.
The company also plans to close Brown & Williamson's cigarette plant in Macon, Ga., which employs 1,200 people.