Former Tobacco Rivals Building on Much Planning as they Merge

Source from:  WINSTON-SALEM, N.C. 08/12/2004

Behind the scenes over the months, a small army of people has been planning the integration of former rivals R.J. Reynolds Tobacco Co. and Brown & Williamson Tobacco Corp. Planning is critical to making a corporate marriage a success, merger experts said. Now that the deal has closed, employees are hard at work implementing all their plans. The full integration of the combined company, which is the main operating subsidiary of the newly created Reynolds American Inc., will take from 18 months to 2 years. As employees observe and go through another huge change, Reynolds American and Wall Street have high hopes that the deal will deliver on the promise of substantial cost savings and a stronger company that is better able to compete in the U.S. cigarette market. "We have been competing against each other for many years, but we've both brought a tremendous amount of creativity and innovation to this industry," Susan Ivey, the chief executive of Reynolds American said last week on a conference call with analysts and investors. "We have very similar values, we have very similar policies between the two companies and I'm really excited about the way they will come together." Jeffrey Eckmann, the executive vice president of strategy, planning and integration for Reynolds American, said that more than 350 Reynolds Tobacco and Brown & Williamson employees have been working on integration planning. Those employees, divided into 13 different groups, cover various parts of the business, such as finance and communications. Under those groups there have been 75 subgroups responsible for planning even more detailed functions of the combined company. Their job has been to examine how the combined company should operate, and what company's practices to adopt. In some cases, new practices will be implemented. Merging two large companies is never easy and merger success is certainly not a given. In fact, research shows that most deals do not live up to their billing. Enditem