Cigarette maker Reynolds to buy Lorillard in $25B deal; to sell some brands

Cigarette maker Reynolds American Inc. is planning to buy rival Lorillard Inc. for about $25 billion in a deal to combine two of the nation's oldest and biggest tobacco companies.

The deal announced Tuesday would create a formidable No. 2 to rival Altria Group Inc., owner of Philip Morris USA, and will likely face scrutiny from regulators.

The companies value the deal at about $27 billion including debt.

Reynolds markets Camel, Pall Mall and Natural American Spirit cigarettes. Lorillard sells Newport, Maverick and Kent cigarettes.

The companies say they will sell the Kool, Salem, Winston, Maverick and blu eCigs brands to Imperial Tobacco Group for $7.1 billion to ease regulatory concerns about competition.