London-based British American Tobacco's (BTI, Financial)(LSE:BATS, Financial) aquisition deal with Reynolds American Inc. (RAI, Financial) has overcome another obstacle that prevented its completion.
In a press release Wednesday, Reynolds American announced Japanese regulators had granted British American unconditional antitrust approval in regard to its proposed deal.
The American tobacco company headquarter in Winston-Salem, North Carolina, said that “together with the previously announced expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, the conditions related to antitrust approvals required as part of the closing conditions to the proposed acquisition have now been satisfied.”
The deal is now expected to close in the third quarter of 2017.
The stock market positively reacted to this news. Reynolds American closed at $63.57 yesterday, up 41 cents or 0.65% from the previous trading day, with a volume of 6.7 million shares traded on the New York Stock Exchange. British American closed at $66.49, up 29 cents from the previous close. A volume of 2.57 million British American shares were traded yesterday on the NYSE.
Reynolds American and British American are uptrending and gained 13% and 18% year to date.
Reynolds American has a market cap of $4.3 billion, a price-earnings (P/E) ratio of 25.7, a forward P/E ratio of 24.39, a price-book (P/B) ratio of 4.10 and a price-sales (P/S) ratio of 7.25.
The American company distributes an annual dividend of $2.04 per share through quarterly payments of 51 cents, for a dividend yield of 3.23%. Ten analysts estimate an average target price of $59.26 per share, which ranges between a low of $54 per share and a high of 62.50 per share. This value represents a 6.8% downside from the current share price.
British American Tobacco has a market cap of $124.04 billion, a P/E ratio of 21.86, a forward P/E ratio of 18.39, a P/B ratio of 12.11 and a P/S ratio of 6.71.
The British company distributes an annual dividend of $2.15 per share through quarterly payments of 54 cents per share, for a dividend yield of 3.24%. The average target price per share is $74.05, which represents a 11.4% upside from the current share price.
Disclosure: I have no positions in any stock mentioned in this article.
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