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FTC expected to approve $27B tobacco deal

Big Tobacco can breathe easy.

The Federal Trade Commission is expected to approve Reynolds American’s $27 billion purchase of Lorillard by a vote of four to one, despite the objections of some agency staff, The Post has learned.

The deal will combine the second- and third-largest cigarette makers, and two of the three most popular brands among young adults, Newport and Camel.

Regulatory approval will clear the way for a three-way transaction that will reshape the tobacco industry. Reynolds and Lorillard also agreed to sell five brands for $7 billion to Imperial.

While there was some skepticism the FTC would approve the deal, the companies argued that the sale of Winston, Kool and other smaller brands would build Imperial into a strong No. 3 player.

Imperial, which has little presence in the US, also persuaded regulators that it can build its business here based on its success overseas, a source said.

While antitrust officials have looked askance at other mega-mergers in the cable and food industries, tobacco is an already tightly controlled industry that generates huge tax revenue.

Even so, critics have called on regulators to block the deal, in part because of concerns about marketing tobacco to children.

Matthew Myers, president of the Campaign for Tobacco-Free Kids, warned last year that the merger could “increase the power of these companies to market to kids.”

Reynolds did not return calls. The FTC declined comment.

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