BAT Buys Polish E-Cig Maker, Joins Reynolds on Research

  • BAT, Reynolds plan to develop vapor technology through 2022
  • Tobacco company buys e-cigarette maker in burgeoning market

British American Tobacco Plc said it’s forming a research alliance with Reynolds American Inc. and agreed to buy Polish e-cigarette maker Chic Group as the tobacco company moves to expand the development of products beyond traditional cigarettes.

BAT and Reynolds plan to share so-called vapor technology, which supplies nicotine to consumers via aerosols, through 2022, the London-based maker of Lucky Strike cigarettes said Tuesday in a statement. Chic, with brands such as Volish, is the e-cigarette leader in Poland.

That market ranks as one of the world’s largest markets for the cigarette alternative. The Polish vapor market will probably grow 31 percent to $572 million this year as tobacco tax increases have led smokers to forsake traditional cigarettes, according to market researcher Euromonitor. Following an excise increase in 2014, tax on cigarettes in Poland is more than 80 percent of the retail price.

Chic sells products in 800 outlets across the country, BAT said, without disclosing the price it paid.

BAT and Winston-Salem, North Carolina-based Reynolds expect to sign a definitive accord by the end of this year after agreeing on a term sheet for the partnership. The Chic acquisition is conditional on approval from Polish antitrust regulators, BAT said.

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