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Imperial Tobacco in Talks to Acquire Reynolds-Lorillard Assets

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Reynolds American Inc. cigarettes
Reynolds American Inc. Pall Mall brand cigarettes are displayed for purchase at a B & N Food Market convenience store in Bagdad, Kentucky. Photographer: Luke Sharrett/Bloomberg

July 11 (Bloomberg) -- Imperial Tobacco Group Plc said it is in discussions with Reynolds American Inc. and Lorillard Inc. to acquire some assets and brands owned by the U.S. tobacco companies in the event of a merger between them.

The maker of Gauloises cigarettes would only proceed with a deal if the terms met its “strict transaction criteria,” Imperial said in a statement, responding to press speculation.

Imperial is lining up $7 billion to buy some brands that Lorillard and Reynolds would sell off to assuage any concerns raised by the U.S. government, people with knowledge of the matter said yesterday. Reynolds, the producer of Camel cigarettes, is closing in on a purchase of Lorillard and may announce a deal as soon as next week with the blessing of British American Tobacco Plc, the people said.

“There can be no certainty as to the terms upon which any acquisition or related debt financing may be agreed or whether any transaction will take place,” Imperial Tobacco said.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editors responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net Robert Valpuesta

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