Reynolds American Inc. to sell worldwide rights to Natural American Spirit

But the Japanese group has just agreed to pay $5bn to Reynolds American for the global rights to the Natural American Spirit brand, which traders said made a move on Imperial less likely.

The company said Japan accounts for the majority of Natural American Spirit’s sales volume outside the United States, with smokers mainly in their 20s and 30s. Under the deal, Japan Tobacco will acquire non-U.S. trademarks and all outstanding shares of Reynolds American subsidiaries outside the US that sell the Natural American Spirit brand.

Santa Fe Natural Tobacco manufactures and markets Natural American Spirit cigarettes and roll-your-own tobacco products.

CEO Susan Cameron answer questions at a press conference, Friday, May 23, 2014, at Reynolds American’s Tobaccoville, N.C., plant where the company announced 200 new jobs producing their Vuse brand electronic cigarette. The sale awaits regulatory approvals in a number of countries. The transaction is expected to be completed by early 2016, JT said in its statement.

“Natural American Spirit, which has a strong and worldwide presence in a premium priced category, will allow the JT Group to further extend its brand portfolio”. Japan Tobacco is one of the world’s biggest tobacco companies whose worldwide brands include Winston and Camel. “This strong and unique brand equity combined with an energetic and experienced team of people will further strengthen our group’s business foundation”.

It has spent billions of dollars to buy tobacco, food and pharmaceutical businesses at home and overseas, including RJR Nabisco’s non-U.S. tobacco business for $7.8 billion in 1999, and Britain’s Gallaher Group for 7.5 billion pounds ($11.37 billion) in 2007.

RAI closed up 1 percent on Monday at $43.42.