Regulatory Approval

British American Tobacco PLC
23 June 2004


   FTC clears proposed combination of R. J. Reynolds Tobacco Co.  and Brown &
                                Williamson Corp.

R.J. Reynolds Tobacco Holdings, Inc. and British American Tobacco p.l.c. have
confirmed that the U.S. Federal Trade Commission has closed its investigation
and will not challenge the companies' plan to combine R.J. Reynolds Tobacco Co.
(RJRT) and the U.S. business of Brown & Williamson Tobacco Corp. (B&W).

The agreement to combine RJRT and B&W's U.S. business provides for establishing
a new publicly traded holding company called Reynolds American Inc.  In
addition, Reynolds American Inc. will pay $400 million in cash to acquire Lane
Limited, which manufactures several cigar, roll-your-own and pipe tobacco brands
and distributes Dunhill tobacco products.


The FTC commissioners' unanimous vote marked the completion of the antitrust
review process.  As the company has previously stated, four key rulings and
approvals are necessary to close the transaction:  clearance by the FTC, rulings
from the U.S. Internal Revenue Service (IRS) regarding the tax-free status of
the transaction, clearance by the Securities and Exchange Commission (SEC) of
the proxy statement/prospectus for shareholders, and RJR shareholder approval.
On June 22, 2004, the companies received favourable private-letter rulings from
the IRS, establishing that the transaction will be tax-free to RJR shareholders
and B&W's parent company, British American Tobacco p.l.c.


RJR will issue a press release when it files an amended registration statement
with the SEC on

Form S-4 containing the proxy statement/prospectus for RJR shareholders, which
will include the date of a special shareholder meeting.  The companies expect
the transaction to close by the end of July.


"We are pleased with the FTC decision, which allows our proposed business
combination to proceed as planned," said Andrew J. Schindler, chairman and CEO
of R.J. Reynolds Tobacco Holdings.  "The combination of RJRT and B&W's U.S.
business, and the acquisition of Lane Limited, mark an extremely positive step
for RJR shareholders.  The creation of Reynolds American Inc. and the
combination of RJRT and B&W will enable us to achieve tremendous efficiencies,
and will greatly enhance the combined companies' ability to compete effectively
in the U.S. marketplace.  The combination is expected to be accretive to
earnings, and improve shareholder value. We estimate the combination of the
companies will generate at least $500 million in synergies once full integration
is complete - which we expect will be about 18 to 24 months after the deal
closes."


"I am delighted that the uncertainty over the planned merger is now largely
over," said Martin Broughton, chairman of British American Tobacco.  "The
creation of Reynolds American will give the Group a 42 percent share in a
stronger and more sustainable business, while improving both our earnings per
share and our cash flow in the first full year following completion.  It's a
great deal for everybody and will have been worth the wait."



Reynolds Tobacco is the second-largest U.S. cigarette manufacturer and marketer.
RJRT's key brands include Camel, Salem, Winston and Doral.  Brown & Williamson
is the third-largest domestic cigarette company. B&W's brands include KOOL, Pall
Mall, Lucky Strike and Misty.



Forward-Looking Information

Some of the statements herein are forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995, including any statements about
satisfying the closing conditions to the proposed transaction.  Such
forward-looking statements are inherently subject to known and unknown risks,
uncertainties and other facts that may cause actual results, performance or
achievements of British American Tobacco and its affiliates to be materially
different from those expected or anticipated in the forward-looking statements.
Any such forward-looking statements are based upon British American Tobacco's
current expectations and assumptions, which may be affected by a number of
factors, including those discussed above.  The following factors are among those
that may cause actual results to materially differ from those expected:  the
approval of the proposed transactions by R. J. Reynolds' shareholders; receipt
and timing of various regulatory approvals; the satisfaction of closing
conditions; the timing of the closing of the proposed transactions; the volume
of products sold by British American Tobacco and the price at which such
products are sold; and government regulations limiting its ability to sell its
products.  British American Tobacco has no responsibility to (and disclaims an
intention to) update the forward-looking statements contained herein to reflect
events or circumstances occurring after the date hereof.


Reynolds American, the holding company to be formed in the proposed transaction,
intends to file a registration statement on Form S-4 that will include a joint
proxy statement/prospectus and other relevant documents in connection with the
proposed transaction.  INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THESE
DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION.  Investors and security holders may
obtain a free copy of the prospectus/proxy statement (when it becomes available)
and other documents filed by R. J. Reynolds and Reynolds American with the SEC
at the SEC's website at www.sec.gov.  Free copies of the prospectus/proxy
statement (when it becomes available), as well as the other documents filed with
the SEC by R. J. Reynolds and Reynolds American, may also be obtained from R. J.
Reynolds by directing a request to R. J. Reynolds at P.O. Box 2866, Winston
Salem, N. C. 27102 - 2866.

ENQUIRIES:

INVESTOR RELATIONS:                        PRESS OFFICE:

Ralph Edmondson/        020 7845 1180      David Betteridge/

Rachael Cummins         020 7845 1519      Teresa La Thangue/       020 7845 2888
                                           Ann Tradigo


                      This information is provided by RNS
            The company news service from the London Stock Exchange