Reynolds American and Lorillard Are Stronger Together

By Andrés Cardenal – Jul 16, 2014 at 9:11AM

NYSE: RAI

Reynolds American Inc.

The acquisition of Lorillard by Reynolds American is a game changer in the U.S tobacco market, and it represents a serious competitive threat to Altria. What are the implications for investors?

The recently announced acquisition of Lorillard (LO.DL) by Reynolds American (RAI) is a major game changer in the U.S tobacco market, and it represents a serious competitive threat for market leader Altria (MO 0.12%). Although a stronger competitive position and scale advantages are big positives for investors in Reynolds American, it's important to consider that the tobacco industry is a particularly risky area for investors.

The following slideshow offers some ideas for investors willing to look at the recently announced merger and its investment implications.

Andrés Cardenal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.