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Contact: Investor Relation: Media: RAI 2011-01 Morris Moore Bryan Hatchell (336) 741-3116 (336) 741-0763

RAI reaches agreement to sell Lane, Limited to STG

WINSTON-SALEM, N.C. – Jan. 14, 2011 – Reynolds American Inc. (NYSE: RAI) announced today that it has reached an agreement to sell Lane, Limited, to Scandinavian Tobacco Group A/S (STG), a global company based in Denmark.

Under terms of the transaction, STG has agreed to pay $205 million in cash for Lane. The Lane operations contribute approximately $0.04 per share to RAI’s annual earnings.

The transaction is expected to close in the first half of 2011, pending anti-trust review and approval.

Lane, based in Tucker, Ga., is a wholly owned subsidiary of RAI. Another RAI subsidiary, R.J. Reynolds Tobacco Company, handles Lane’s sales, marketing and distribution through a services agreement. Lane manufactures a variety of tobacco products including Kite and Bugler roll-your-own tobacco, and Captain Black pipe tobacco. STG is the world’s leader in pipe tobacco sales, holds a shared No. 1 position in sales of cigars internationally, and has a strong position within roll-your-own in Scandinavia.

“Reynolds American’s operating companies are strategically focused on key brands in the cigarette, moist-snuff and modern smoke-free categories of the tobacco business, so this is an opportunity to maximize the potential of the Lane business and brands under an owner who is focused on the ‘other tobacco products’ (OTP) category,” said Susan M. Ivey, president and chief executive officer of Reynolds American.

Lane has about 110 employees at two facilities in Tucker — a manufacturing and office facility, and a leased warehousing facility. Under terms of the agreement, STG will take over Lane’s facilities and expects to continue to operate them.

“The sale allows RAI and its operating companies to devote their energy and resources to the primary growth categories within their businesses,” Ivey said. “I wish to thank the employees of Lane for their dedication and years of hard work.”

RBC Capital Markets served as RAI’s financial adviser for the transaction, and Jones Day served as RAI’s legal counsel.

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ABOUT US

Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; , LLC; Santa Fe Natural Tobacco Company, Inc.; and Niconovum AB.  R.J. Reynolds Tobacco Company is the second-largest U.S. tobacco company. The company’s brands include five of the 10 best-selling cigarettes in the U.S.: , , Winston, and Kool.  American Snuff Company, LLC (formerly Conwood Company, LLC) is the nation’s second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, and Levi Garrett.  Santa Fe Natural Tobacco Company, Inc. manufactures cigarettes and other additive-free tobacco products, and manages and markets other super-premium brands.  Niconovum AB markets innovative nicotine replacement therapy products in Sweden and Denmark under the Zonnic brand name. Copies of RAI's news releases, annual reports, SEC filings and other financial materials, including risk factors containing forward-looking information, are available at www.ReynoldsAmerican.com. ###