Tobacco Company Reynolds In Talks To Buy Company For Quitters

03/18/2010 05:12 am ET | Updated May 25, 2011

RICHMOND, Va. — Reynolds American Inc., maker of Camel cigarettes and Grizzly smokeless tobacco, is in talks to buy a Swedish company that helps people stop smoking, a tobacco expert who said he was briefed by people close to the talks told The Associated Press Monday.

The second-largest U.S. tobacco company is eyeing Niconovum AB, which sells cigarette replacement products in gum, pouch and spray form outside the U.S., according to David Sweanor, a Canadian law professor and tobacco expert.

The deal, which could be worth $44.5 million, could be imminent, he said.

Sweanor said Reynolds' interest in Niconovum may be focused on offering smoking alternatives rather than products meant to help people stop using nicotine and tobacco.

"The market's coming to understand that nicotine products exist on a very broad continuum of risk, and cigarettes are at the far risky end of that, and it's possible to have far less hazardous products that would probably meet the needs for a very significant number of smokers," Sweanor said.

The possibility of a deal between Reynolds and Niconovum was first reported by the Wall Street Journal.

Karl Olov Fagerstrom, an expert on smoking cessation and nicotine dependence, formed Niconovum in 2000, according to its Web site. Niconovum did not immediately return calls seeking comment.

Reynolds American spokesman David Howard declined to comment.

Reynolds, like all tobacco companies, is looking to cigarette alternatives such as smokeless tobacco for growth as demand for cigarettes has declined as taxes, health concerns, smoking bans and social stigma have increased.

The company, based in Winston-Salem, N.C., has introduced Camel brand moist, smokeless tobacco and snus – small teabag-like pouches that users stick between the cheek and gum. It also has introduced dissolvable tobacco products – finely milled tobacco shaped into orbs, sticks and strips – in test markets.

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