After months of unconfirmed reports, the two cigarette makers acknowledged the talks Friday. If completed, the deal would create a tobacco behemoth, one with a strong foothold in the increasingly popular electronic cigarette market.
The companies, two of the nation's oldest, had more than $13 billion in combined sales last year.
Reynolds American, the nation's second-largest tobacco company, produces the Camel and Pall Mall cigarette brands. Greensboro, N.C.-based Lorillard owns Newport, the popular menthol brand. And it has a strong presence in e-cigarettes with its blu and Skycig brands.
Reynolds, of Winston-Salem, N.C., also owns the e-cigarette brand Vuse.
The companies said there was no guarantee a deal would be reached.
If they combine, Reynolds, founded in 1875, and Lorillard, in 1760, would likely prove a strong challenger to Altria, the nation's largest tobacco maker and parent of Philip Morris.
Also on Friday, the United Kingdom's