BAT Vapor Business Biggest in World Outside United States

British American Tobacco reports that its alternative tobacco products, such as its Vype brand, point to the future.

February 24, 2017

LONDON – British American Tobacco (BAT) sees the future and it’s not cigarettes, The Telegraph reports. BAT recently reported that its vapor business, driven by the Vype electronic cigarette, is now the biggest in the world outside of the United States.

Overall, the volume growth of traditional cigarettes continues to sag, but BAT and other tobacco firms are countering that by launching different tobacco products. For example, BAT debuted glo, a tobacco heating product in Japan in late 2016.

Management said the proposed deal to buy the 57.8pc of Reynolds American it does not already own would give it a “world class portfolio of tobacco and Next Generation Products,” and that it would enhance earnings at the enlarged group. The transaction is expected to close during the third quarter subject to shareholder and regulatory approvals being sought. If the deal goes ahead, the company would become the world's largest listed tobacco company by sales.

“If we’re going to massify the market—inject life into it—we have to come up with these innovative, groundbreaking products,” said Kingsley Wheaton, who heads BAT’s next-generation products, in a December Wall Street Journal article about tobacco firms opening storefronts.

Meanwhile, last month BAT announced its purchase of Reynolds American Inc. for $49 billion, thus becoming the world’s largest listed tobacco firm once the deal is finalized.

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