Acquisitions: Taking a $4.9 Billion Bite

Taking a $4.9 Billion Bite

While General Motors went shopping last week for a high-tech aircraft and ) electronics manufacturer, R.J. Reynolds seemed convinced that plenty of money could still be made on cookies and crackers. Reynolds, the second largest U.S. cigarette maker, agreed to buy Nabisco Brands, the fifth biggest food manufacturer, for $4.9 billion. The merged company will have annual sales of more than $19 billion, making it the largest consumer-products firm in the U.S.

Troubled for years by an increasingly strident antismoking movement, Reynolds has long been eager to reduce its dependence on tobacco. Cigarettes currently account for 75% of the company's earnings....

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