BAT's merger with Reynolds gains US antitrust approval

British American Tobacco's proposed €49.4bn merger with rival Reynolds American has gained antitrust approval in the US.

The acquisition satisfied conditions related to antitrust approval as its waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on 8 March.

Antitrust approval for the acquisition, which is expected to close in the third quarter of 2017, is currently underway in Japan.

The deal is set to create the biggest listed tobacco company with brands including Newport Camel, Lucky Strike and Pall Mall coming under one roof and will mark a return to the US market for BAT after 12 years.

In 2004, BAT merged its subsidiary Brown & Williamson with RJ Reynolds to form Reynolds American and in 2016 Reynolds bought Lorillard for $27.4bn.

The FTSE 100 company had been in talks with Reynolds for months to buy the 57.8% stake it does not already own and the American tobacconist initially rejected an offer last November.

Shares in British American Tobacco were down 0.25% to 5,089p at 1251 GMT.