An announcement by Reynolds American, the parent of R.J. Reynolds, said the deal had been approved by the boards of directors of all companies. Under the cash and stock transaction, Lorillard shareholders will get $50.50 in cash and 0.2909 of a share of Reynolds for each of their shares for a valuation of $68.88 per share based on the closing price Monday.
The deal gives the No. 1 tobacco company, Altria — owner of Philip Morris — a much more formidable competitor. It could also reduce the workforces of the companies and raise cigarette prices.