NEW YORK (TheStreet) -- Reynolds American (RAI) is reportedly in talks to work out a deal with or for Lorillard (LO), according to the Financial Times. TheStreet's Debra Borchardt said Reynolds American is known for its Camel and Pall Mall brands. The company is 42%-owned by London-based British American Tobacco (BTI). 

Lorillard is known for its brands Maverick and Newport, the latter the top-selling menthol cigarette in the U.S., Borchardt said. The company also has a commanding lead in the e-cigarette business, with its industry-leading product, Blu. 

So it makes perfect sense why Reynolds American would want to acquire Lorillard, she pointed out.

However, the deal could push north of $20 billion, she said. That's why Wells Fargo analyst Bonnie Herzog suggests that perhaps a merger between the two tobacco giants may be a more likely outcome. 

Borchardt suggested a merger between the two companies would allow for them to reach a strategic partnership for global distribution of e-cigarettes. Shares of the two companies are on fire, figuratively. Reynolds American is up 10% since Monday's open, and Lorillard is up roughly 14% in the same time.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

More from Opinion

Trump Blinks on China Trade War That's Looking Harder to Win

Trump Blinks on China Trade War That's Looking Harder to Win

Monday Madness: GE, China, and Micron

Monday Madness: GE, China, and Micron

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

How Technology Will Unleash the Legal Marijuana Industry's Growth Potential

How Technology Will Unleash the Legal Marijuana Industry's Growth Potential

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense