BRITISH American Tobacco (BAT) has proposed a $47 billion (£38.3 billion) merger with US tobacco firm Reynolds, the maker of Camel and Pall Mall.
The deal would create the world's largest listed tobacco company.
BAT currently owns 42.2 per cent of Reynolds and the proposal involves the acquisition of the remaining 57.8 per cent of the company.
If approved, the deal would bring a raft of global brands under one roof, including BAT products like Dunhill, Lucky Strike, Rothmans, Kool, and Kent, and Reynolds brands like Newport, Camel, Pall Mall, Doral, Misty, and Capri slims.
The news sent BAT shares soaring by more than 3.2 per cent, making it one of the best performing stocks in the FTSE 100.
BAT chief executive Nicandro Durante said: "We have been a shareholder in Reynolds since its creation in 2004 and have benefited from its growth in the US market.
"The proposed merger of our two great companies is the logical progression in our relationship and offers all shareholders a stake in a stronger, truly global tobacco and next generation products company.
"BAT is proud of its track record of consistent delivery for shareholders and this transaction would further strengthen that delivery in the future."
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