Reynolds American Inc. agreed to buy rival Lorillard Inc. for about $25 billion excluding debt, a deal that would leave the 400-year-old U.S. tobacco industry with two competitors controlling 90 percent of the market.

Reynolds, the producer of Camel and Pall Mall cigarettes, will pay a mixture of cash and stock valuing each Lorillard share at $68.88, according to a statement. British American Tobacco Plc will fund $4.7 billion of the transaction, letting it maintain a 42 percent stake in Reynolds. BAT’s U.K. rival Imperial Tobacco Group Plc, meanwhile, will acquire brands such as Kool and Blu e-cigarettes for $7.1 billion, potentially assuaging antitrust concerns.

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