Office of the Secretary

July 30, 2015

Kristina Barker

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the merger between 

Reynolds and Lorillard will lead to higher prices for cigarettes. The Commission has 

placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the 

Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

The purpose of the Consent Agreement is to mitigate anticompetitive concerns 

resulting from Reynolds acquiring Lorillard, such as higher cigarette prices. Specifically, 

it requires Reynolds to divest several brands to Imperial Tobacco Group plc (“Imperial”). 

Based on the evidence, including the investment strategy that Imperial has publicly 

described, the Commission has concluded that the divestiture of the brands to Imperial 

would be sufficient to restore the competitive environment that would have existed absent 

the acquisition. The divestiture provides Imperial with a robust opportunity to undertake 

procompetitive actions to grow its market share in the U.S. cigarette market and help 

remedy the competitive concerns raised by the merger, such as higher cigarette prices. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Robert Bobak

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168 

 

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that even with the proposed 

divestment, Imperial Tobacco Group plc (“Imperial”) will be unable to compete against 

the two leading U.S. cigarette companies. The Commission has placed your comment on 

the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 

C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. The divestiture provides 

Imperial with a robust opportunity to undertake procompetitive actions to grow its market 

share in the U.S. cigarette market and help remedy the competitive concerns raised by the 

merger.

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

H. Louise Butler

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that Imperial Tobacco Group 

plc (“Imperial”) does not have a good history of maintaining market share in the cigarette 

market and that this may drive future job losses. The Commission has placed your 

comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules 

of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. The divestiture provides 

Imperial with a robust opportunity to undertake procompetitive actions to grow its market 

share in the U.S. cigarette market and help remedy the competitive concerns raised by the 

merger. Although the Commission has no authority to intervene in current or future labor 

decisions, the Commission has determined that the transfer of Lorillard’s workforce to 

Imperial will help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

 Donald S. Clark

 Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Kenneth Caldwell

Caldwell Wholesale Company, Inc.

State of Louisiana

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letters to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letters, you express concern that the Reynolds acquisition 

of Lorillard already has reduced competition. In particular, you express concern that 

wholesalers who had been direct purchasers from Lorillard, but not Reynolds, are no 

longer able to purchase Newport directly from Reynolds. The Commission has placed 

your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s 

Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In general, a manufacturer has wide latitude to decide which customers to do 

business with. In this instance, it does not appear that the fact that Reynolds, after the 

acquisition, has chosen to sell Newport to certain wholesale accounts and not others, is 

itself evidence of a reduction in competition in the marketplace. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

J. Caviness

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that Reynolds is divesting 

brands that are in decline to Imperial Tobacco Group plc (“Imperial”) and that this may 

result in job losses at Imperial. The Commission has placed your comment on the public 

record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 C.F.R. § 

4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. The divestiture provides 

Imperial with a robust opportunity to undertake procompetitive actions to grow its market 

share in the U.S. cigarette market and help remedy the competitive concerns raised by the 

merger. Although the Commission has no authority to intervene in current or future labor 

decisions, the Commission has determined that the transfer of Lorillard’s workforce to 

Imperial will help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

 Donald S. Clark

 Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Garry Collins

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, FTC File No. 141-0168

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands being divested 

to Imperial Tobacco Group plc (“Imperial”) are declining brands. The Commission has 

placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the 

Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, an approach that 

Imperial has successfully executed with brands in other international markets. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

 Donald S. Clark

 Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Jeff Davis

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands Reynolds is 

divesting to Imperial Tobacco Group plc (“Imperial”) are dead brands, that Imperial

previously lost market share in the cigarette market when it acquired Commonwealth,

that Imperial will not be able to effectively compete against Reynolds and Altria, and that 

there is the potential for job losses at Lorillard. The Commission has placed your 

comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules 

of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, an approach that 

Imperial has successfully executed with brands in other international markets. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger. Although the Commission has no authority to 

intervene in current or future labor decisions, the Commission has determined that the 

transfer of Lorillard’s workforce to Imperial will help Imperial be competitive. 

 After careful consideration of your comment and the entire record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

John Smith

State of Georgia

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, Reynolds 

American Inc. (“Reynolds”), and Lorillard, Inc. (“Lorillard”). The proposed settlement is 

intended to resolve the competitive concerns raised by the acquisition of Lorillard by 

Reynolds. In your letter, you express concern that the brands being divested to Imperial 

Tobacco Group plc (“Imperial”) are declining brands insufficient to restore competition, 

that the brands lack shelf space to be competitively significant, and that job losses will 

occur as a result. The Commission has placed your comment on the public record 

pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 C.F.R. § 

4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. In 

addition, as part of the Consent Agreement, Reynolds must guarantee Imperial visible 

retail shelf-space for a period of five months following the close of the transaction to help 

the brands grow. The divestiture provides Imperial with a robust opportunity to 

undertake procompetitive actions to grow its market share in the U.S. cigarette market

and help remedy the competitive concerns raised by the merger. Although the 

Commission has no authority to intervene in current or future labor decisions, the 

Commission has determined that the transfer of Lorillard’s workforce to Imperial will 

help Imperial be competitive. 

 After careful consideration of your comment and the entire record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

 Donald S. Clark

 Secretary
Office of the Secretary

July 30, 2015

Kilby

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands being divested 

to Imperial Tobacco Group plc (“Imperial”) are declining brands insufficient to restore 

competition and that, as a Lorillard employee, you will lose your job. The Commission 

has placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the 

Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger. Although the Commission has no authority to 

intervene in current or future labor decisions, the Commission has determined that the 

transfer of Lorillard’s workforce to Imperial will help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

Kuhn

State of Missouri

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands Reynolds is 

divesting to Imperial Tobacco Group plc (“Imperial”) are dying brands, that Imperial will 

not be able to compete against Reynolds and Altria, and that it is necessary to have at 

least three strong competitors in the cigarette market. The Commission has placed your 

comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules 

of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. In the 

U.S., Imperial will shift immediately from being a small regional producer with limited 

competitive influence on the larger firms, to become a national competitor with the thirdlargest cigarette business in the market. The divestiture provides Imperial with a robust 

opportunity to undertake procompetitive actions to grow its market share in the U.S. 

cigarette market and help remedy the competitive concerns raised by the merger.

 After careful consideration of your comment and the entire record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

Lane

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168 

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands being divested 

to Imperial Tobacco Group plc (“Imperial”) are declining brands, and therefore there is 

little hope for Imperial to be a viable competitor in the future. The Commission has 

placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the 

Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, an approach that 

Imperial has successfully executed with brands in other international markets. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger.

After careful consideration of your comment and the entire record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Antonette Simmons

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the proposed settlement 

will not fully replace the current competition in the cigarette market and that Imperial 

Tobacco Group plc (“Imperial”) has not demonstrated an ability to compete in the United 

States effectively. The Commission has placed your comment on the public record 

pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 C.F.R. § 

4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. Imperial will shift 

immediately from being a small regional producer with limited competitive influence on 

the larger firms, to become a national competitor with the third-largest cigarette business 

in the market. The divestiture provides Imperial with a robust opportunity to undertake 

procompetitive actions to grow its market share in the U.S. cigarette market and help 

remedy the competitive concerns raised by the merger. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

Stanley Smith

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the merger between 

Reynolds and Lorillard will allow for unfair pricing, give an unfair advantage to the 

largest two tobacco companies, and lead to job losses. The Commission has placed your 

comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules 

of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

The purpose of the Consent Agreement is to mitigate anticompetitive concerns 

arising from Reynolds acquiring Lorillard. Specifically, it requires Reynolds to divest

several brands to Imperial Tobacco Group plc (“Imperial”). Based on the evidence, 

including the investment strategy that Imperial has publicly described, the Commission 

has concluded that the divestiture of the brands to Imperial would be sufficient to restore 

the competitive environment that would have existed absent the acquisition. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger, such as higher cigarette prices. Although the 

Commission has no authority to intervene in current or future labor decisions, the 

Commission has determined that the transfer of Lorillard’s workforce to Imperial will

help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

Smith

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands being divested 

to Imperial Tobacco Group plc (“Imperial”) are declining brands insufficient to restore 

competition, that the brands lack shelf space to be competitively significant, and that the 

merger will result in higher prices for consumers. The Commission has placed your 

comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules 

of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. In 

addition, as part of the Consent Agreement, Reynolds must guarantee Imperial visible 

retail shelf-space for a period of five months following the close of the transaction to help 

the brands grow. The divestiture provides Imperial with a robust opportunity to 

undertake procompetitive actions to grow its market share in the U.S. cigarette market 

and help remedy the competitive concerns raised by the merger.

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

Nathan Stone

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that your present day benefits 

as an hourly Lorillard employee are at risk, including, potentially, your job. The 

Commission has placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) 

of the Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

Under the terms of the Consent Agreement, Reynolds must divest a substantial set 

of assets to Imperial Tobacco Group plc (“Imperial”). These assets include, among 

others, Lorillard’s manufacturing facility and headquarters. Together with this decision, 

Imperial will make offers of employment to the Lorillard workforce. Although the 

Commission has no authority to intervene in current or future labor decisions, the 

Commission has determined that the transfer of Lorillard’s workforce to Imperial will 

help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

Watkins

Commonwealth of Virginia

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that the brands Reynolds is 

divesting to Imperial Tobacco Group plc (“Imperial”) are in steep decline, that the merger 

is unfair to consumers, and that the livelihoods of workers affected by this merger are at 

risk. The Commission has placed your comment on the public record pursuant to Rule 

4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. The 

divestiture provides Imperial with a robust opportunity to undertake procompetitive 

actions to grow its market share in the U.S. cigarette market and help remedy the 

competitive concerns raised by the merger. Although the Commission has no authority to 

intervene in current or future labor decisions, the Commission has determined that the 

transfer of Lorillard’s workforce to Imperial will help Imperial be competitive. 

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary
Office of the Secretary

July 30, 2015

[Name Withheld]

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

 Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. The Commission has placed your comment on the public record 

pursuant to Rule 4.9(b)(6)(ii) of the Commission’s Rules of Practice, 16 C.F.R. § 

4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands 

and the ability of Imperial Tobacco Group plc (“Imperial”) to compete effectively. Based 

on that evidence, including the investment strategy that Imperial has publicly described, 

the Commission concluded that the divestiture of the brands to Imperial would be 

sufficient to restore the competitive environment that would have existed absent the 

acquisition. The divestiture provides Imperial with a robust opportunity to undertake 

procompetitive actions to grow its market share in the U.S. cigarette market and help 

remedy the competitive concerns raised by the merger.

 After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and 

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

By direction of the Commission, Commissioner Brill and Commissioner Wright 

dissenting.

Donald S. Clark

Secretary

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
Office of the Secretary

July 30, 2015

[Name Withheld]

State of North Carolina

Re: In the Matter of Reynolds American and Lorillard, File No. 141-0168

Thank you for your letter to the Federal Trade Commission (the “Commission”) 

commenting on the proposed Consent Agreement between the Commission, and 

Reynolds American Inc. (“Reynolds”) and Lorillard, Inc. (“Lorillard”). The proposed 

settlement is intended to resolve the competitive concerns raised by the acquisition of 

Lorillard by Reynolds. In your letter, you express concern that after this merger, 

Reynolds will control shelf space and prices through the EDLP program and that Imperial 

Tobacco Group plc (“Imperial”) will therefore be unable to compete. The Commission 

has placed your comment on the public record pursuant to Rule 4.9(b)(6)(ii) of the 

Commission’s Rules of Practice, 16 C.F.R. § 4.9(b)(6)(ii). 

In considering whether to accept the proposed Consent Agreement, the 

Commission considered an array of evidentiary materials relating to the divested brands

and the ability of Imperial to compete effectively. Based on that evidence, including the 

investment strategy that Imperial has publicly described, the Commission concluded that 

the divestiture of the brands to Imperial would be sufficient to restore the competitive 

environment that would have existed absent the acquisition. For example, Imperial’s 

strategy calls for it to reposition the acquired brands to increase sales, a strategy that 

Imperial has successfully executed with brands in other international markets. In 

addition, as part of the Consent Agreement, Reynolds must guarantee Imperial visible 

retail shelf-space for a period of five months following the close of the transaction to help 

the brands grow. The divestiture provides Imperial with a robust opportunity to 

undertake procompetitive actions to grow its market share in the U.S. cigarette market 

and help remedy the competitive concerns raised by the merger.

After careful consideration of your comment and the entire evidentiary record, the 

Commission has determined that the public interest would best be served by issuing the 

Decision and Order as final without modification. A copy of the final Decision and

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580
2

Order is enclosed for your information. Relevant materials also are available from the 

Commission’s website at www.ftc.gov. Thank you for your interest in the Commission’s 

antitrust enforcement mission and for your comment regarding this Consent Agreement.

 By direction of the Commission, Commissioner Brill and Commissioner Wright

dissenting.

Donald S. Clark

Secretary