P.M. BRIEFING : Reynolds to Quit Brazil Market
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NEW YORK — After years of losses on its operations in Brazil, R. J. Reynolds Tobacco Co. said today that it will sell its tobacco businesses in that country for $50 million in cash and exit the market.
The buyer, Dibrell Brothers Inc., said today that it intends to sell the Reynolds cigarette division including five local brands to Philip Morris Cos., which already has an 8.5% share in the Brazilian market, for an undisclosed price.
The transaction, analysts said, would leave Philip Morris in a position to double its market share in Brazil, where annual per capita cigarette consumption is among the highest in the world.
London-based BAT Industries controls about 83% of the Brazilian cigarette market, primarily because of the dominance of its Hollywood brand, said John C. Maxwell, a tobacco industry analyst for Wheat First Butcher & Singer in Richmond, Va.
Philip Morris, which already sells Marlboro, Benson & Hedges, Parliament and a local brand, Mistura Fina, in Brazil, has agreed to buy the rights to Reynolds’ local brands Luxor, Tropical, Vila Rica, Chancellor and LX.
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