R.J. Reynolds Bidding to Acquire Santa Fe Natural
R.J. Reynolds Tobacco Holdings Inc., the second-largest cigarette maker in the United States, announced plans Thursday to buy the maker of American Spirit cigarettes.
Details of the offer were scarce on Thanksgiving Day, but a release from RJR said the company had offered $320 million in cash for Santa Fe Natural Tobacco Co.
The sale is subject to approval by shareholders and regulatory officials. If approved, Santa Fe would continue to operate from its Santa Fe, N.M., headquarters as a wholly owned subsidiary of RJR.
“The agreement to purchase Santa Fe is consistent with our goal of maximizing shareholder value,” Andrew J. Schindler, chairman and chief executive of RJR, said.
“This acquisition will provide near-and long-term earnings growth in areas where we have expertise and can bring value. Santa Fe is a company with a history of growth based on a strong brand with excellent equity positioning.”
Officials at Santa Fe Natural Tobacco did not immediately return calls. A spokeswoman for RJR said she could not comment on details.
The RJR offer comes a little more than month after Rothmans Inc., Canada’s second-largest cigarette manufacturer, announced its plans to buy Santa Fe Natural for $275 million.
Rothmans has five days to respond to the RJR agreement.
Santa Fe Natural’s additive-free American Spirit cigarettes are made with organic tobacco. Marketed in distinctive packages bearing the silhouette of a pipe-smoking American Indian in a feathered headdress, the cigarettes are sold in all 50 states and overseas.
Santa Fe Natural Tobacco, founded in 1982, employs about 115 people in Santa Fe, 100 in its factory in Oxford, N.C., and 10 more at a distribution center near Reno.
R.J. Reynolds Tobacco Holdings is the parent company of R.J. Reynolds Tobacco Co. The Winston-Salem, N.C.-based company employs more than 9,000 workers. Its brands include Camel, Salem, Winston, More and Vantage. The company also markets Eclipse, which heats tobacco instead of burning it.
In trading on the New York Stock Exchange on Wednesday, shares of R.J. Reynolds closed unchanged at $56.80.
