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Reynolds American Moves into Smokeless Tobacco 

Reynolds American Inc. (RAI) broke into the smokeless tobacco category with the $3.5 billion agreement to purchase a holding company that owns Conwood, the nation's second largest manufacturer of smokeless tobacco products.

Citigroup reported that the acquisition was a "good strategic move for RAI to secure the No. 2 position in the smokeless market and keep it out of the hands of its major competitor, PM (Phillip Morris) USA."

"Conwood provides us with a significant, strategic platform within the growing moist snuff category that would have taken years to build," said Susan M. Ivey, chairman and chief executive officer of Reynolds American. "The moist snuff category has been growing at four percent to five percent for the past five years. Clearly, we're excited by this unique opportunity to gain immediate scale and strength in the category."

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