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Reynolds American To Split Stock, Raise Div; CEO To Retire

10/15 09:01 AM



DOW JONES NEWSWIRES

Reynolds American Inc.'s (RAI:$59.9700,$0.2100,0.35%) board approved an 8.9% increase in the quarterly dividend and a 2-for-1 stock split as the tobacco company announced longtime Chairman and Chief Executive Susan Ivey plans to retire next year.

The change comes as the second-largest U.S. tobacco company behind Altria Group Inc. (MO:$24.8000,$0.1800,0.73%) has been expanding smokeless-tobacco manufacturing operations while shutting cigarette plants to consolidate production. It has also moved to focus on a few key brands, as industrywide cigarette volume has been shrinking.

Ivey became president and CEO in 2004 and was named chairman two years later. She plans to retire at the end of February, after 30 years in the tobacco industry.

Daniel Delen, head of the company's R.J. Reynolds Tobacco unit, will succeed her in the executive roles while Thomas Wajnert, the board's lead director, will become chairman on Nov. 1.

The stock split plan will leave about 583 million shares outstanding. The dividend was raised to 49 cents from 45 cents on a split-adjusted basis. It would cost the company an additional $93 million a year.

Shares closed Thursday at $59.97 and were inactive premarket. The stock is up 13% this year.


-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@ dowjones.com
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(END) Dow Jones Newswires
10-15-100901ET
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