Following a public comment period, the Federal Trade Commission has approved a final order settling charges that the $27.4 billion merger of tobacco companies Reynolds American Inc. and Lorillard Inc. would likely harm competition in the U.S. market for cigarettes.
Under the order, first announced in May 2015, Reynolds is required to divest to Imperial Tobacco Group four cigarette brands: Winston, Kool, Salem, and Maverick. It also must divest the Lorillard manufacturing facilities in Greensboro, North Carolina, and provide Imperial with the opportunity to hire most of the existing Lorillard management, staff, and salesforce.
The order also appoints a monitor to oversee the divestiture, and it requires the newly merged Reynolds and Lorillard to furnish Imperial with support during the transition, including guaranteed access to retail shelf space for a short period.
The Commission vote approving the final order was 3-2, with Commissioners Julie Brill and Joshua D. Wright voting no. (FTC File No. 1410235; the staff contact is Robert Tovsky, Bureau of Competition, 202-326-2634)
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