July 3 Tobacco majors Lorillard Inc and Reynolds American Inc are likely to merge as early as end of July, CNBC reported, citing sources.
Reuters, in May, exclusively reported that Reynolds American was in active discussions to buy Lorillard in a complicated, three-way transaction that could see British American Tobacco PLC take a major role to back a potential merger.
Lorillard share rose as much as 6.2 percent, while those of Reynolds American were up nearly 3 percent.
Imperial Tobacco Group Plc was evaluating a deal for assets likely to be divested from Reynolds American and Lorillard if the two U.S. tobacco companies proceed with a proposed combination, Reuters reported last month.
Lorillard had a market capitalisation of $22.17 billion as of Wedesday's close, while Reynolds' market value was $32.25 billion. (Reporting by Shailaja Sharma in Bangalore; Editing by Saumyadeb Chakrabarty)