jumped to a new 52-week high Wednesday following U.S. approval of its plan to combine its operations with the U.S. business of
Brown & Williamson Tobacco
, a unit of U.K.-based
British American Tobacco
In a statement late Tuesday, the companies said the Federal Trade Commission had closed its investigation and would not challenge the plan on antitrust grounds.
Reynolds shares popped $4.62, or 7%, to $70.52 in premarket trading, eclipsing their previous 52-week high of $68.25.
The businesses are to be combined into a new publicly traded holding company called
Reynolds American Inc.
The $3 billion cash and stock deal still needs approval by the
Securities and Exchange Commission
as well as shareholders.
The companies expect the transaction to close by the end of July and will create at least $500 million in cost savings once full integration is complete in 18 to 24 months. Reynolds will hold a controlling interest in the new company.
The deal "will enable us to achieve tremendous efficiencies, and will greatly enhance the combined companies' ability to compete effectively in the U.S. marketplace," RJR said in a statement.