When British American Tobacco Plc bid $47 billion last year to buy the 58% of Reynolds American Inc. that it doesn't own, the coast was clear. BAT's existing stake nullified the threat of counterbids and regulatory issues looked nonexistent. Then Americans voted in Donald Trump.
The president-elect and the Republican-controlled Congress want to slash the 35% tax rate for U.S. corporations. Trump wants to cut the rate to 15%, while House Republicans are seeking 20%.
For Winston-Salem, N.C.-based Reynolds, which makes almost all of its $6 billion profit domestically, that's a boon. For BAT, it's a major headache, because the resulting higher earnings for Reynolds would justify an increase of as much as $8.2 billion in the bid, according to analysts.
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