Tobacco giant BAT buys out US firm Reynolds for $49.4 billion

British American Tobacco agreed on Tuesday to pay almost $50 billion for control of US firm Reynolds American, creating the world's largest listed tobacco company. BAT will purchase the 57.8-per cent of Reynolds American that it does not already own, BAT said, unveiling an improved cash-and-shares offer after the US giant had rejected its previous $47-billion bid.

The deal brings together a raft of global brands, including BAT products Lucky Strike, Rothmans and Kent, and Reynolds' brands such as Newport, Camel and Pall Mall.

The combined company will have a strong foothold in the United States, and a significant presence in high-growth markets including South America, the Middle East and Africa.

BAT added it would also create a "truly global" business for fast-growing next generation products (NGP) like e-cigarettes or vaping. 

"We are very pleased to have reached an agreement with ... Reynolds and we look forward to putting the recommended offer to shareholders," said BAT Chief Executive Nicandro Durante in a statement.