Will BAT and Reynolds create a tobacco supergiant?
In a deal worth £38 billion ($47 billion), British American Tobacco is planning to merge with Reynolds American Tobacco, combining the biggest names in the industry including Camel, Dunhill, and Lucky Strike.
BAT has been a shareholder of Reynolds for 12 years, and now it is offering $20 billion in cash and $27 billion in shares for the American company. The merger still needs to be approved by all company directors at Reynolds.
Nigel Driffield of Warwick Business School is a Professor of International Business and is a researcher of the tobacco industry. He said of the news: "The planned takeover of Reynolds by BAT represents the final step of a process that the two companies embarked on some time ago. The markets in which these firms are the dominant players are declining, and they face ever increasing competition from Asia in seeking to develop new markets. This merger will therefore lead to further rationalisation of both RJR and BAT, and give complete access to RJR's US production facilities for BAT.
"This is likely to lead to increased production of BAT’s UK brands in the US, with fewer exports to the US from the UK. Demand in the US and UK markets has been declining for some time, with increased use of substitute products including e-cigarettes.
"For some time now US and UK tobacco firms have come under pressure at home from health groups as they seek new markets, and they face increased market penetration from Asian and European firms who receive less adverse comment at home for seeking to expand into developing countries. This merger is therefore the next stage in moves to reduce the cost base in the UK and US."
Clik here for more on Professor Driffield's research on the tobacco industry.
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Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.