September 22, 2015 / 10:31 AM / 2 years ago

UPDATE 1-BAT to buy Polish e-cigarette firm, signs deal with RJ Reynolds

(Adds details)

Sept 22 (Reuters) - British American Tobacco Plc said it would buy Poland’s CHIC Group, owner of Europe’s largest e-cigarette retailing network, and signed a vapour technology-sharing term sheet with RJ Reynolds Tobacco Co, a unit of Reynolds American Inc.

The deals are the latest in BAT’s push to expand in the fast-growing e-cigarette business, where the world’s second-biggest cigarette maker has said it sees huge potential.

BAT, whose conventional cigarette brands include Dunhill, Lucky Strike and Pall Mall, already sells a line of e-cigarettes called Vype in the UK.

CHIC Group has 800 points of sale in Poland, a dedicated e-liquids production facility, a modern research and development centre, and leading Polish e-cigarette brands.

The financial details of the deal were not disclosed.

E-cigarettes allow users to inhale nicotine-laced vapour but contain no tobacco. Most of the chemicals that cause smoking-related diseases are absent.

BAT said its arrangement with RJ Reynolds provides a framework for collaboration and cross-licensing of the parties’ vapour product technologies up to the end of 2022.

BAT shares were down 1.7 percent at 3498 pence by 1022 GMT. The FTSE-100 index was down 2.2 percent.

Reporting by Aastha Agnihotri in Bengaluru; Editing by Anupama Dwivedi and Ted Kerr

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