R.J. Reynolds Buying Santa Fe Natural

R.J. Reynolds Tobacco Holdings Inc. won the battle to acquire Santa Fe Natural Tobacco Co., a small player with an affluent following, announcing a definitive agreement to buy the firm for $340 million in cash.

Privately held Santa Fe, with $94 million in annual sales, had sparked a bidding war between No.2 U.S. tobacco company R.J. Reynolds and Canadian tobacco company Rothmans Inc., partly because of the appeal of its Natural American Spirit cigarettes.

The cigarettes are touted as additive-free. The firm notes that this does not mean they are safer than other cigarettes.

R.J. Reynolds shares rose 3 cents to close at $56.85 on the NYSE.