British American Tobacco (BAT) is planning to merge with its US partner Reynolds in a deal which is valued at $47bn.
BAT wants to buy the 57.8% of Reynolds it does not already own, reports the BBC.
The merger would bring together some of the tobacco industry's best-known brands, including Lucky Strike, Rothmans, Dunhill and Camel cigarettes.
BAT has been a shareholder in Reynolds since 2004 and the company said the merger was ‘the logical progression in our relationship'.
The FTSE 100 company is offering $20bn in cash and $27bn in shares for the US business. This values Reynolds at $56.50 a share, compared to its closing price of $47.17 on Thursday.
BAT estimates that it can make $400m worth of cost-savings through the merger.
The company has not yet held talks with Reynolds and said the merger would have to be approved by all the US company's independent directors.
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