RJR breakup

[Robert Weissman <rob@essential.org>]

RJR Company Press Release


RJR NABISCO AGREES TO SELL INTERNATIONAL TOBACCO BUSINESS FOR $8 BILLION;
BOARD APPROVES SPIN-OFF PLAN FOR DOMESTIC TOBACCO COMPANY
Tue, 9 Mar 1999 09:33:53 -0500

March 9, 1999

RJR NABISCO AGREES TO SELL INTERNATIONAL TOBACCO BUSINESS FOR $8 BILLION;
BOARD APPROVES SPIN-OFF PLAN FOR DOMESTIC TOBACCO COMPANY



NEW YORK, NEW YORK -- March 9, 1999 -- RJR Nabisco Holdings Corp. (NYSE:
RN) today announced that it has entered into a definitive agreement to sell
its international tobacco business for $8 billion, including the assumption
of $200 million of net debt, to Japan Tobacco Inc. The company also said
that its board of directors approved a plan to separate its domestic
tobacco business, R.J. Reynolds Tobacco Co., from its Nabisco food
business, following completion of the international tobacco sale.

"The sale of Reynolds International accomplishes a paramount strategic
objective for our company," said Steven F. Goldstone, chairman and chief
executive officer of RJR Nabisco. "It enables us to realize extraordinary
value from that business and paves the way for us to separate the domestic
tobacco business from the rest of our organization on a sound and prudent
financial basis."

Sale of International Tobacco Business

Under the terms of the sales agreement, Japan Tobacco will acquire all of
the business and trademarks of R.J. Reynolds International, including the
international rights to Camel, Winston and Salem.

Tokyo-based Japan Tobacco is one of the world's largest manufacturers of
tobacco products and the leading tobacco company in Japan, with a market
share of nearly 80 percent in that country and a growing presence overseas.
The company also is establishing itself in a number of other industries,
including pharmaceuticals and foods.

"We are delighted that Japan Tobacco will be purchasing our international
tobacco business," said Mr. Goldstone. "They have superb management and
tremendous financial resources and they are committed to realizing the
enormous potential of Reynolds International's trademarks throughout the
world.

RJR Nabisco said it will use proceeds from the sale to reduce debt and for
general corporate purposes, which will enable it substantially to
strengthen the financial position of Reynolds Tobacco Co. The sale is
subject to satisfaction of certain regulatory conditions and receipt of
certain consents from RJR Nabisco's bondholders. The company said it
expects the sale to be completed within two months.

Separation of Food and Tobacco Businesses

RJR Nabisco said that the separation of the businesses will be accomplished
by a tax-free spin-off to shareholders of shares in the domestic tobacco
business. Upon completion of the spin-off, RJR Nabisco will continue to
exist as a holding company, owning 80.6 percent of Nabisco Holdings Corp.
The company will be re-named Nabisco Group Holdings. The re-named Nabisco
Group Holdings and Nabisco Holdings Corp. would each continue to trade as
separate companies on the New York Stock Exchange.

RJR Nabisco said that it will announce the specifics of the separation
transaction, which will be subject to final board approval, following the
completion of the sale of the international tobacco business.

"We believe that the food and tobacco businesses will best be able to
achieve their full potential under separate ownership structures," said Mr.
Goldstone. "Each is a large, complex business with very different
challenges, strategies and means of doing business. We also will achieve
substantial expense savings by eliminating the RJR Nabisco headquarters and
most of its corporate staff functions. In short, a spin-off transaction is
in the long-term interest of each business as well as current and future
shareholders."

R.J. Reynolds Tobacco Co.

As an independent company, Reynolds Tobacco will have four of the country's
leading cigarette brands -- Camel, Winston, Salem and Doral -- and will be
the second-largest tobacco company in the United States. Reynolds Tobacco
had total revenue of $5.6 billion in 1998. The company will be based in
Winston-Salem, N.C. and its shares will be publicly traded on the New York
Stock Exchange.