...Sector and Rating Outlooks Stable: Fitch Ratings expects stable ratings for Fitch-rated U.S.- based tobacco entities and a stable sector outlook in 2015, reflecting relatively steady credit profiles backstopped by sustained net price realization in the traditional cigarette category, manageable litigation risk and growing diversification arising from innovation. Merger Creates Stronger Second: Major consolidation emerged during 2014 with Reynolds American Inc.'s intention to purchase Lorillard Inc. in a complex transaction involving Imperial Tobacco and British American Tobacco (BAT). The deal, set to close in the first half of 2015, places Reynolds American in a more formidable position to compete against the market leader, Altria Inc., while more than doubling Imperial Tobacco's current U.S. market share. Volumes, Smokers Declining: The mature tobacco industry faces the omnipresent challenge of mitigating traditional cigarette volume pressure as smoking declines from regulatory constraints...
