RJ Reynolds Announcement

British American Tobacco PLC
02 August 2004

       RJR, B&W Complete Transaction; Reynolds American Inc. Established



The following statement has been released by R.J. Reynolds Tobacco Holdings Inc.





WINSTON-SALEM, N.C. - July 30, 2004 - R.J. Reynolds Tobacco Holdings, Inc. (RJR)
and Brown & Williamson Tobacco Corporation (B&W) today completed the transaction
that formed a new publicly traded company, Reynolds American Inc. (NYSE: RAI),
and combined their respective U.S. tobacco businesses.



"The closing of this transaction marks a major milestone for R.J. Reynolds and
Brown & Williamson," said Andrew J. Schindler, executive chairman of Reynolds
American.  "Reynolds American will be both financially and operationally
stronger, and in an excellent position to provide attractive returns to
shareholders."



"Completing this deal on the terms proposed last October and in line with the
anticipated timetable is the result of a remarkable collaborative effort by
people on both sides of the Atlantic," said Jan du Plessis, chairman of British
American Tobacco p.l.c. (AMEX:  BTI).  "I would like to thank them for all their
tremendous work on behalf of our shareholders, for whom the transaction is
expected to be earnings and cash flow enhancing in 2005."



Susan Ivey, president and CEO of Reynolds American, said, "Today we realized a
tremendous opportunity in creating a brand new company with over 200 years of
combined experience and innovation.  We have an excellent leadership team and a
new board that will bring invaluable insight and advice to our company.  The
integration teams have done a terrific job over the last eight months in putting
together the best practices, processes and talent in the new organizations.
Reynolds American is ready to execute on day one.



"We will now focus our attention on creating a new business model and
brand-portfolio strategy that will enable R.J. Reynolds Tobacco to enhance its
competitive position in the U.S. market and continue to return value to
shareholders," she continued. "And we remain confident that we can do so while
realizing more than $500 million in annual synergies within the next two years."



Reynolds American common stock will begin trading on the New York Stock Exchange
on August 2, 2004. Based on the 2003 results of its four operating subsidiaries
- R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc., Lane
Limited and R.J. Reynolds Global Products, Inc. - Reynolds American Inc. would
have annual sales of $8.4 billion and volume of approximately 172 billion units
(including contract manufacturing).   The company will have approximately 8,100
employees and be headquartered in Winston-Salem, N.C.


Following are other highlights of the transactions completed today:

•         Existing RJR shareholders own approximately 58 percent of Reynolds
American common stock through a tax-free one-for-one exchange.

•         Through B&W, BAT owns about 42 percent of the approximately 150
million shares of Reynolds American common stock.

•         Reynolds American Inc.'s board of directors will have 13 members.   In
addition to Schindler and Ivey, members will include six independent directors
of the former RJR board and five directors designated by the BAT Group (three
independent and two BAT executives).

•         R.J. Reynolds Tobacco Company's newly broadened portfolio of iconic
cigarette brands includes five of the top 10 U.S. brands.  Reynolds Tobacco
manufactures about one of every three cigarettes sold in the United States.

•         RJR paid BAT $400 million in cash for Lane Limited, a Georgia-based
company that manufactures several roll-your-own, pipe tobacco and little cigar
brands, and distributes Dunhill tobacco products.



A conference call will be webcast on Monday, Aug. 2, 2004, at 9:30 a.m. Eastern
Daylight Time following the release that morning of the second-quarter financial
results of R.J. Reynolds Tobacco Holdings, Inc.  Members of the new Reynolds
American management team will be on the call to discuss RJR's second-quarter
results, provide an update on the integration of the tobacco operating
companies, and discuss initial plans for Reynolds American.  The conference call
will be available online on a listen-only basis at www.RJRHoldings.com.



Cautionary Information Regarding Forward-Looking Statements

Statements included in this news release that are not historical in nature are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
regarding RAI's future performance and financial results include risks and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. These risks include the substantial
and increasing regulation and taxation of the cigarette industry; various legal
actions, proceedings and claims relating to the sale, distribution, manufacture,
development, advertising, marketing and claimed health effects of cigarettes
that are pending or may be instituted against RAI or its subsidiaries; the
substantial payment obligations and limitations on the advertising and marketing
of cigarettes under various litigation settlement agreements; the continuing
decline in volume in the domestic cigarette industry; competition from other
cigarette manufacturers, including increased promotional activities and the
growth of deep-discount brands; the success or failure of new product
innovations and acquisitions; the responsiveness of both the trade and consumers
to new products and marketing and promotional programs; the ability to realize
the benefits and synergies arising from the combination of RJR Tobacco and the
U.S. cigarette and tobacco business of B&W; any potential costs or savings
associated with realigning the cost structure of RAI and its subsidiaries; the
ability to achieve efficiencies in manufacturing and distribution operations
without negatively affecting sales; the cost of tobacco leaf and other raw
materials and commodities used in products; the effect of market conditions on
the performance of pension assets and the return on corporate cash; and the
ratings of RAI securities. Due to these uncertainties and risks, undue reliance
should not be placed on these forward-looking statements, which speak only as of
the date of this news release. Except as provided by federal securities laws,
RAI is not required to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.



                                   ENQUIRIES



British American Tobacco Press Office             Investor Relations

David Betteridge/Ann Tradigo/Teresa La Thangue   Ralph Edmondson/Rachael Cummins
[phone] (24 hours)                  [phone] or 1519






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