I'm in and adding anywhere under $1...big tobacco investors would be wise to diversify/hedge their bets with XXII, imo. that, or plead ignorance later...
Avoid RAI if you want to keep your sanity, it?s a disaster. I am playing Ultimate Stock Alerts (search them in Google) instead
New England Journal of Medicine just published a pivotal study on XXII's low nicotine cigarettes and...the verdict is: they work to dramatically reduce smoking! Now the FDA will compel ALL cigarettes to be lower in nicotine...this study marks the end of Big Tobacco reign over addicting smokes and ushers in new era of low nicotine tobacco as the only legal tobacco. XXII will now control Big Tobacco and the 70 billion domestic industry. Mark my words and check in again in 2 years. Google the low nicotine study and do your own DD.
Has anyone checked out the tax impact of the merger in taxable accts = devastating to say the least.
Why I believe the Feds permitted this deal to proceed since the US Treasury received a windfall in tax revenues.
Use of proceeds from the sale will improve the bottom line nicely. Still, I was a bit surprised that BTI did not buy the American Spirit brand ex-USA marketing rights.
@The agreement gives Japan Tobacco rights to a brand that has won a following among younger smokers. But the purchase comes at a hefty price of nearly 300 times the pretax profit of the Natural American brand in non-U.S. markets in 2014. Reynolds, the maker of Camel cigarettes, is expected to receive an estimated $3.5 billion after taxes from the deal, according to RBC Capital Markets. RBC analyst Nik Modi said the sale allows the company to pay down its Lorillard debt “more quickly than…investors expected,” reducing annual interest expenses by $150 million and increasing earnings by 7 cents per share in 2017. Ms. Cameron said it was better for Reynolds American to sell the brand’s non-U.S. rights to a company such as Japan Tobacco with an established global sales infrastructure rather than trying to build such infrastructure itself.
BTI continues to hold a large equity stake in RAI so they obviously value in the firm. Japan Tobacco already owns ex-USA rights to Camel (and Winston). I believe Newport is only sold in the USA so that brand could be expanded internationally (or a license sold as was just done for Natural American).
Evidently, JTI want to focus on selling US-brands outside USA, while BTI wants exposure to US brands in their home market. Very different strategies.
the company has defacto monetized its brands. If spirit is worth $5 billion, I can only imagine what camel and/or Newport are worth. and with a 60 billion market cap, this company might be way under-priced.
Well that was quick... and is is ex-USA as I suspected, so RAI continues to grow and profit from the American Spirit brand in USA. Sweet.
@Reuters) - Japan Tobacco Inc has agreed to pay 600 billion yen ($5 billion) in cash for Reynolds American Inc's Natural American Spirit tobacco business outside the United States, the two companies said in separate statements on Tuesday. The deal, to be concluded by early 2016 pending regulatory approval, includes related trademarks and subsidiaries primarily in Japan and Europe, where operations will continue unchanged, Japan Tobacco said. Koizumi's counterpart at Reynolds American, Susan M. Cameron, said Natural American Spirit would benefit from a sale to a global company such as Japan Tobacco, rather than Reynolds American investing to support the brand internationally. Cameron also said the sale will allow Reynolds American to focus on the United States, as all international rights to its cigarette trademarks will be owned by international tobacco companies. Its Camel and Winston brands are also owned abroad by Japan Tobacco.
Yup... RAI is green in a sea of red. Very impressive indeed Even mighty MO finished red despite that Inbev-SABMiller deal still brewing
The key word here is 'some'. I suspect that might mean a license to market the brand ex-USA. I wonder what BTI thinks about this. Funny that Japan Tobacco didn't bid for the assets divested as part of the RAI-LO merger ... or maybe they did and ITYBY beat them out?
@The Japanese firm may acquire assets worth about $5 billion, including some of the Natural American Spirit tobacco brand that is part of a Reynolds operating company Reynolds’ Santa Fe Natural Tobacco Company, which owns Natural American Spirit, reported $658 million of revenue in fiscal year 2014, compared with $572 million in 2013 Santa Fe could be worth as much as $7.6 billion as a standalone business, according to a note published on Thursday by Bonnie Herzog, an analyst at Wells Fargo Securities, which has an outperform rating on Reynolds’ stock. “Any transaction would monetize an asset that we have long believed to be underappreciated and undervalued by the market,” wrote Herzog. “This is a win-win scenario for RAI shareholders.”
comes Japan Tobacco with an offer to buy some RAI assets, including the Natural American Spirits brand. I wonder, is this a deal a license for outside the USA and RAI keeps the US market? And what about BTI... will they put n a bid too? I guess anything is possible if 'The Price is Right'.
@Japan Tobacco Inc. is in talks to buy cigarette assets from Reynolds American Inc. as the company seeks to expand outside of its shrinking home market, according to people familiar with the talks. The Japanese firm may acquire assets worth about $5 billion, including some of the Natural American Spirit tobacco brand that is part of a Reynolds operating company, said the people, who asked not to be identified because the information is private. While discussions are advanced, talks could still fall apart and the size of the deal and the makeup of the assets could still change, they said.
thumbs-down...? because a company has found out how to produce lower-nicotine (i.e., possible LESS ADDICTIVE) tobacco that could save millions in lives AND money over the next years...? it's a socially conscious investment, imo, that will pay off big-time one day. People want to quit, but the nicotine addiction is strong...XXII may be the answer! but, keep being ignorant and giving it the thumbs-down; I'll be back in awhile to remind you about Twenty-Second Century...XXII - remember it.
imo, it's the future of smoking - the great taste of tobacco WITHOUT the high nicotine levels that make cigs addictive - check it out at stock symbol XXII!