Reynolds American, the second largest tobacco company in the US, is reportedly in talks to buy a Swedish maker of smoking cessation products.
Winston-Salem, North Carolina-based Reynolds, whose products include Camel, Kool and Pall Mall cigarettes as well as Grizzly snuff, is said to be interested in acquiring Niconovum AB in order to broaden its market offering.
The value of the deal could be as much as $49 million (Ôé¼32 million), according to reports.
The news has been seen by analysts as a strong indicator of the nicotine industryÔÇÖs changing nature.
Sales of cigarettes in the US have been declining in recent years, prompting Reynolds to move into products that could present smaller health risks to users than cigarettes.
The company currently sells a smokeless tobacco range, which includes Camel SnusÔÇöa type of tobacco that satisfies nicotine cravings but exposes users to less risk than regular tobacco.
According to the UKÔÇÖs Royal College of Physicians, smokeless tobacco is between one-tenth and one-one thousandth as hazardous as smoking, depending on the product.
Reynolds does not yet market or sell any approved smoking-cessation products, which have thus far been typically manufactured and marketed by pharmaceutical companies including GlaxoSmithKline and Johnson & Johnson.
Helsingborg-based Niconovum makes Zonnic gum and mouth spray designed to reduce cigarette cravings. The company was founded in 2000 by Karl Olov Fagerstrom, a leading expert in nicotine dependence who was involved in developing the Nicorette brand.
The Swedish firmÔÇÖs products are not currently sold in the US.
ReynoldsÔÇÖ cigarette division generated $1.87 billion (Ôé¼1.2 billion), which amounted to 87 per cent of the companyÔÇÖs revenue, in the third quarter of this year.
The firm ranks second in US sales behind Altria Group, the manufacturer of Marlboro cigarettes and Skoal snuff.
Reynolds controls about 28 per cent of the US cigarette market by volume.
If Reynolds were to acquire Niconovum, the products would have to be approved by the Food and Drug Administration before going on sale.
Studies have shown that smoking-cessation products enhance the ability of smokers to give up; however, some complain that existing smoking-cessation devices fail to deliver enough nicotine to help them get over their habit.
Niconovum says on its website that it sees a marketplace for products that ÔÇ£will deliver nicotine more quickly and effectivelyÔÇØ, thereby ÔÇ£giving the consumer a perceived better control of cravings.ÔÇØ
Neither Reynolds nor Niconovum have yet commented on the reports.
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