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Pall Mall cigarettes are seen after the manufacturing process in the British American Tobacco Cigarette Factory (BAT) in Bayreuth, southern Germany, April 30, 2014.Reuters file

British American Tobacco (BAT) announced on Tuesday that it will be acquiring the remaining 57.8 percent stake in US cigarette company Reynolds for $49.4 billion in a cash-and-stock deal. The deal values the acquisition at $59.64 Reynolds share; each Reynolds shareholder will get $29.44 in cash and 0.5260 BAT ordinary shares.

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"The transaction has been unanimously approved by the Transaction Committee of independent Reynolds directors established to evaluate the BAT offer. The transaction has also been approved by the Boards of Reynolds and BAT," the London-based company said in a statement.

BAT added that the deal represents a premium of 26 percent over the closing price of Reynolds share on October 20, 2016 when the offer was first made.

BAT had offered to Reynolds's investors $24.13 in cash and $32.37 in shares in October last year.

"The cash component of the transaction will be financed by a combination of existing cash resources, new bank credit lines and the issuance of new bonds. A $25bn acquisition facility has been entered into with a syndicate of banks to provide financing certainty," BAT said in the statement.

BAT's cigarette brands include Dunhill, Benson & Hedges, Kent, Lucky Strike, Pall Mall and Rothmans, while Reynolds American owns Newport, Camel and Pall Mall.

BAT's 2015 revenues (after deducting duty, excise and other taxes) stood at £13,104 million and the company sold 663 billion cigarettes in more than 200 markets globally last year.

America is the second-largest cigarette market after China and the deal will enable BAT to consolidate its business in the lucrative market where Reynolds already has 35 percent market share.

Cigarette companies in China's neighbouring country India include ITC, Godfrey Phillips and VST Industries. ITC shares were trading at Rs 251 on the BSE at around 2.35 pm on Tuesday.

In India, cigarette sales dropped to a 15-year-low of 88.1 billion sticks for calendar year 2015, marking a fall of 8.2 percent from 95.2 billion stocks sold in the previous year, the Mint had reported last July, citing a study by Euromonitor. India has the second-highest number of tobacco smokers in the world, at about 275 million people.