R.J Reynolds, Gallaher in Joint Tobacco Venture

WINSTON-SALEM, N.C. - R.J. Reynolds Tobacco Holdings Inc. and British tobacco firm Gallaher Group Plc. have formed a joint venture to market American blend cigarette brands in Europe, Reuters reports.

Through the deal, Gallaher aims to grow in markets in which it is relatively small, while R.J. Reynolds looks to grow the international market for American blend cigarettes.

The joint venture company, R.J. Reynolds-Gallaher International SARL, will be headquartered in Switzerland.

The cigarettes will initially be sold in France, Spain, Italy and the Canary Islands, and include Gallaher's Benson & Hedges American Blend and Benson & Hedges Red brands and R.J. Reynold's new blend, Reynolds.

R.J. Reynolds said it expects to contribute $75 million to $100 million to the venture over the next five years, according to Reuters. The joint venture company will receive manufacturing, sales, distribution and marketing support services from Gallaher.
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