Reynolds, UST deal sits on back burner

Merger would make sense, analysts say, but not likely soon

By Brian Louis
WINSTON-SALEM JOURNAL

Old ideas die hard.

Over the years, analysts have speculated over the possibility of Reynolds American Inc. and its publicly traded predecessor, R.J. Reynolds Tobacco Holdings Inc., buying smokeless-tobacco giant UST Inc.

This fall the speculation surfaced again. However, nothing has happened, and despite good reasons for a deal, some analysts say they think that the probability of a purchase is relatively low.

Although a purchase of UST is intriguing and could make financial sense for Reynolds American, analysts said that the company already has enough on its plate.