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US: M&A may push tobacco firms past checkered history

 |  January 22, 2014

After a federal court ruled earlier this month that major tobacco companies must launch advertisements to correct past statements about the health effects of their products, reports say the industry could be set for a round of consolidation.

According to reports, major tobacco firms preferred to keep themselves separate from their counterparts operating outside the US, as non-American tobacco firms faced much less threat of litigation. But as experts conclude that tobacco firms’ risk in the US has similarly been reduced in recent years, reports say a wave of merger and acquisition activity could strike the industry, even after the court will require the companies to launch their ads to apologize for “deliberately deceiving” the public regarding their products.

According to reports, the UK’s British American Tobacco could merge with Reynolds American, which manufacturers the Camel brand cigarette. In a recent presentation to shareholders, Reynolds American has reportedly found that pending smoking and health” lawsuits have dropped from 352 to just 69 in the last 13 years.

Full Content: CNBC

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