B&W Free to Move Equipment from Plant

Source from:  Telegraph Staff Writer By Linda S. Morris 06/09/2004

Brown & Williamson Tobacco will have to pay more than $8 million in taxes if it has any manufacturing equipment in its Macon facility as of Jan. 1. But B&W has taken the next step so it can move the equipment out of Bibb County - even before the merger has received government regulatory approval. The Macon-Bibb County Industrial Authority on Monday signed the final documents transferring the equipment back to the company. The authority agreed in April with B&W's request to terminate the authority's bond issue with the company so it could move the equipment. "Brown & Williamson wanted this done quicker rather than later," said Kevin Brown, the authority's attorney. "They weren't specific about a time, but they didn't want to wait anymore." Fred McConnell, senior manager of communications and public affairs at the Macon plant, could not be reached late Monday for comment. In 1993, the authority issued $475 million in bonds to be paid out during 25 years for new B&W equipment, and the company still owed about $300 million, Brown said. Currently, B&W is paying about $4 million to the county in taxes for the equipment, Brown said. Because of an incentive arrangement with the county, the company had been paying less than 50 percent of the taxes due on its equipment and land. However, that deal was in effect only while the company still owed on the bonds. The authority has a letter from the Bank of New York showing the full amount of the loan had been paid, Brown said. B&W officials appear certain its merger with R.J. Reynolds Tobacco will be approved by the Federal Trade Commission, Brown said, despite recent speculation the deal may hit a snag. "The only thing I know is they are very confident," Brown said. "They were adamant about this." Officials from both companies have said repeatedly they expect the merger to gain FTC approval by mid-year. The newly created company, Reynolds American, will be located in Winston-Salem, N.C., and the Macon plant will close. The FTC staff has asked for three extensions since the merger was announced last October. RJR has agreed it will not complete the merger transaction before Friday - the most recent extension date the FTC requested. The extensions have caused some financial analysts to question if the deal will be approved, or if the approval will require Reynolds American to get rid of some brands in order to ensure competition in the market. The merger also requires approval from the Internal Revenue Service and RJR stockholders. Enditem