[Intl-tobacco] RJR - Gallaher joint venture

[Robert Weissman]

Tuesday July 16, 8:40 am Eastern Time

Reuters Business Report
R.J Reynolds, Gallaher in Tobacco Venture

July 16, 2002

WINSTON-SALEM, N.C. (Reuters) - R.J. Reynolds Tobacco Holdings Inc.
(NYSE:RJR - News) and British tobacco firm Gallaher Group Plc.
(London:GLH. - News; NYSE:GLH - News) have formed a joint venture to
market American blend cigarette brands in Europe, the companies said
Tuesday.

The deal is expected to help Gallaher grow in markets in which it is
relatively small, while putting R.J. Reynolds in the growing
international market for American blend cigarettes, the companies said.

The cigarettes, which will initially be sold in France, Spain, Italy and
the Canary Islands, include Gallaher's Benson & Hedges American Blend
and Benson & Hedges Red brands and R.J. Reynolds' new blend, Reynolds.

R.J. Reynolds expects to contribute $75 million to $100 million to the
venture over the next five years, the companies said. The joint venture
company will receive manufacturing, sales, distribution and marketing
support services from Gallaher.
The joint venture company, R.J. Reynolds-Gallaher International SARL,
will be headquartered in Switzerland.