Tobacco shares power FTSE higher as merger talks heat up

clock •

Tobacco stocks pushed the FTSE 100 higher at open today after details of a mega-merger between two of the largest US tobacco companies reached final stages.

According to reports, Reynolds American and Lorillard, along with key Reynolds stakeholder British American Tobacco, have agreed the price at which the merger will go through.

The are now finalising details - such as which branding and production facilities to dispose of - in order to meet antitrust standards.

Talk that details of the merger could be announced anyday sent shares surging just after 8am.

British American Tobacco was up 1.7%, while peer Imperial Tobacco climbed 3.3%.

The shares - favoured by a number of well-known income fund managers, among them Neil Woodford - pushed the wider FTSE 100 index up 0.3% at 6,690 points.

Negotiations between the three parties began earlier this year, but have increased in activity in recent days. However, no deal has yet been confirmed by the

Reynolds brands include Camel and Pall Mall, while Lorillard brands include Maverick and Old Gold. Lorillard also has a profitable business selling the Newport brand of menthol cigarettes.

More on Investment

Aberdeen dials back government bond and property conviction amid inflation risk

Aberdeen dials back government bond and property conviction amid inflation risk

Preference for EM equities

Michael Nelson
clock 13 October 2026 • 2 min read
Partner Insight: The Gilt Edge - Triple deadlock

Partner Insight: The Gilt Edge - Triple deadlock

The Gilt Edge is a new UK newsletter that brings PIMCO’s insights on the UK economy, public policy and financial markets directly to your inbox. Written by Rupert Harrison, Senior Adviser to PIMCO’s UK Portfolio Management Team and former Chief of Staff to Chancellor of the Exchequer.

Pimco
clock 13 October 2026 • 4 min read
Partner Insight: Are investors looking for an AI bubble in the wrong place?

Partner Insight: Are investors looking for an AI bubble in the wrong place?

As the AI industry expands rapidly, Vaughan Nelson thinks we should be wary of booms in narrower parts of the AI ecosystem.

Vaughan Nelson, Natixis Investment Managers
clock 08 October 2026 • 9 min read
Trustpilot