RAI - reaches agreement to sell Lane Limited to Scandinavian Tobacco Group A/S (STG)..

January 14, 2011 - Reynolds American Inc. (RAI) announced today, January 14th that it has reached an agreement to sell Lane Limited, to Scandinavian Tobacco Group A/S (STG), a global company based in Denmark. Under terms of the transaction, STG has agreed to pay $205 million in cash for Lane. The Lane operations contribute approximately $0.04 per share to RAI’s annual earnings. The transaction is expected to close in the first half of 2011, pending anti-trust review and approval.

Lane, based in Tucker, Ga., is a wholly owned subsidiary of RAI. Another RAI subsidiary, R.J. Reynolds Tobacco Company, handles Lane’s sales, marketing and distribution through a services agreement. Lane manufactures a variety of tobacco products including Kite and Bugler roll-your-own tobacco, and Captain Black pipe tobacco.

Lane Limited manufactures and markets specialty tobacco products. It provides pipe tobaccos, rolling tobaccos, cigarettes, and cigars, as well as sells hand-rolling cigarette machines, and cigarette tubes and papers. The company offers bulk pipe-tobaccos for specialist smoke shops. It exports its products to Japan, Nigeria, Turkey, and Russia. Lane Limited also markets a range of cigars from Holland, as well as cigarette brands from Jamaica and Canada. The company was founded in 1890 and is based in Tucker, Georgia. Lane Limited operates as a subsidiary of Reynolds American, Inc.

STG is the world’s leader in pipe tobacco sales, holds a shared No. 1 position in sales of cigars internationally, and has a strong position within roll-your-own in Scandinavia. (October 4, 2010 - New Global Company: Swedish Match and Scandinavian Tobacco Group..)

Lane has about 110 employees at two facilities in Tucker — a manufacturing and office facility, and a leased warehousing facility. Under terms of the agreement, STG will take over Lane’s facilities and expects to continue to operate them.

Reference: RAI reaches agreement to sell Lane, Limited to STG, Reynolds American, 1/14/2011.