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• Reynolds American Completes Acquisition of Conwood 

Reynolds American Inc. (NYSE: RAI) today completed its $3.5 billion acquisition of a holding company that owns Conwood, the nation's second largest manufacturer of smokeless tobacco products, from business interests of the Pritzker family.

The transaction, which was announced April 25, 2006, received required approval from the Federal Trade Commission on May 23, 2006. Reynolds American funded the $3.5 billion acquisition purchase price with the net proceeds of its private offering of $1.65 billion of senior secured notes and borrowings under its $1.55 billion senior secured term loan facility, each of which also closed today, as well as available cash. In addition, RAI entered into a $550 million revolving credit facility today.

"We are excited about the growth prospects Conwood brings to Reynolds American," said Susan M. Ivey, RAI's chairman and chief executive officer.

"Conwood's strong, well-positioned brands are gaining share in the growing moist snuff market, and its high margins will enhance our ability to continue to provide an excellent return to our shareholders."

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