THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended (the “FSMA”) if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser. If you have sold or otherwise transferred all of your existing ordinary shares in British American Tobacco p.l.c. (“BAT” or the “Company” and together with its subsidiary undertakings, the “BAT Group”), please send this document, together with the accompanying form of proxy (the “Proxy Form”), Proxy Form – South Africa (“PFSA”) or Voting Instruction Form, as appropriate, (other than documents or forms personalised to you) as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. However, these documents should not be forwarded, distributed or transmitted in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction. If you have sold or otherwise transferred only part of your holdings of ordinary shares in BAT (the “BAT Shares”) you should retain these documents and contact the bank, stockbroker or other agent through whom the sale or transfer was effected. This document should be read in conjunction with the prospectus published by BAT in relation to the Proposed Acquisition (as defined below) on or around the date of this document (the “Prospectus”) relating to the new ordinary shares (the “New BAT Shares”) to be issued pursuant to the Proposed Acquisition. This document is not a prospectus and it does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation of any offer to sell, dispose of, purchase or subscribe for, any securities. BRITISH AMERICAN TOBACCO P.L.C. (Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 03407696) Proposed Acquisition of Reynolds American Inc. and Notice of General Meeting This document should be read as a whole. Your attention is drawn to the risk factors set out on pages 22 to 34 of Part II (Risk Factors) and to the letter from your Chairman which is set out on pages 8 to 21 of Part I (Letter from the Chairman) of this document and which recommends you vote in favour of the resolution to be proposed at the General Meeting referred to below. Notice of the general meeting of BAT to be held at 2pm on 19 July 2017 at Hilton London Bankside, 2-8 Great Suffolk Street, London SE1 0UG, United Kingdom (the “General Meeting”) is set out at the end of this document (the “Notice of General Meeting”). A Proxy Form, PFSA or Voting Instruction Form, as appropriate, for use at this General Meeting is enclosed. To be valid, the Proxy Form, PFSA or Voting Instruction Form, as appropriate, should be completed, signed and returned in accordance with the instructions printed thereon and Appendix 1 of the Notice of General Meeting. Proxy Forms and PFSAs must be received (1) in the case of a BAT Shareholder on the UK Register by Computershare Investor Services PLC (the “UK Registrar”), at The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, United Kingdom; or (2) in the case of a BAT Shareholder holding certificated BAT Shares on the SA Register by Computershare Investor Services Proprietary Limited (the “SA Registrar”), at Rosebank Towers, 15 Biermann Avenue, Rosebank 2196, (PO Box 61051, Marshalltown 2107), South Africa, as soon as possible but in any event must arrive not later than 48 hours before the time fixed for the start of the meeting. This document is a circular relating to the Proposed Acquisition which has been prepared in accordance with the Listing Rules. Holders of BAT Shares (the “BAT Shareholders”) are advised to read the Prospectus which contains information relating to the BAT Shares. The Prospectus will be available on BAT’s website. If you have any questions about this document, the General Meeting or the completion and return of the Proxy Form or PFSA, as appropriate, please contact the UK Registrar between 8.30am and 5.30pm (UK Time) Monday to Friday (excluding public holidays) on 0800 408 0094 (from the United Kingdom), or +44 370 889 3159 (from outside the United Kingdom, international rates apply) or the SA Registrar in relation to certificated BAT Shares on the SA Register between 8am and 5pm (South Africa time) Monday to Friday (excluding public holidays) on +27 11 370 5000. Please note that calls may be monitored or recorded and the Registrars cannot provide financial, legal or tax advice on the merits of the Proposed Acquisition. Centerview Partners UK LLP (“Centerview Partners”) is authorised and regulated by the Financial Conduct Authority (the “FCA”) in the United Kingdom. Centerview Partners is acting as joint financial adviser to the Company and no one else in connection with the Proposed Acquisition and will not be responsible to any person other than the Company for providing the protections afforded to clients of Centerview Partners or for providing advice in relation to the Proposed Acquisition or any other matter referred to in this document. Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank (the “ECB”)) and in the United Kingdom, by the Prudential Regulatory Authority (the “PRA”). Deutsche Bank AG is subject to the supervision by the ECB and by BaFin, Germany’s Federal Financial Supervisory Authority, and is subject to limited regulation in the United Kingdom by the PRA and the FCA. Deutsche Bank AG, acting through its London Branch (“Deutsche Bank”) is acting as joint financial adviser and joint sponsor to the Company and no one else in connection with the Proposed Acquisition and will not be responsible to any person other than the Company for providing the protections afforded to clients of Deutsche Bank or for providing advice in relation to the Proposed Acquisition or any other matter referred to in this document. UBS Limited (“UBS”) is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom. UBS is acting as joint financial adviser and joint sponsor to the Company and no one else in connection with the Proposed Acquisition and will not be responsible to any person other than the Company for providing the protections afforded to clients of UBS or for providing advice in relation to the Proposed Acquisition or any other matter referred to in this document. Apart from the responsibilities and liabilities, if any, which may be imposed on Centerview Partners, Deutsche Bank or UBS by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, Centerview Partners, Deutsche Bank and UBS accept no responsibility whatsoever for, or make any representation or warranty, express or implied, as to the contents of this document, including its accuracy, completeness or for any other statement made or purported to be made by either of them, or on their behalf, in connection with BAT, the BAT Group, the New BAT Shares or the Proposed Acquisition. Centerview Partners, Deutsche Bank and UBS and their subsidiaries, branches and affiliates accordingly disclaim all and any duty, liability and responsibility whether arising in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement or otherwise. Persons into whose possession this document comes should inform themselves about, and observe, any applicable restrictions and legal, exchange control or regulatory requirements in relation to the distribution of this document and the Proposed Acquisition. Any failure to comply with such restrictions or requirements may constitute a violation of the securities laws of any such jurisdiction. The contents of this document should not be construed as legal, business or tax advice. Notice to overseas shareholders The release, publication or distribution of this document in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and should observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Proposed Acquisition disclaim any responsibility or liability for the violation of such requirements by any person. i NOTICE TO US SHAREHOLDERS Additional information and where to find it This document is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that have been and may be made with the United States Securities and Exchange Commission (the “SEC”) in connection with the Proposed Acquisition. Nonetheless, BAT, and its affiliates and each of their directors and executive officers and certain employees may be deemed to be participants in the solicitation of proxies from the holders of Reynolds American Inc. (“RAI”) common stock with respect to the Proposed Acquisition. Information about certain of such parties and a description of their interests are set forth in BAT’s annual report for the year ended 31 December 2016, which may be obtained free of charge from BAT’s website www.bat.com and RAI’s annual report for the year ended 31 December 2016, which was filed on Form 10-K with the SEC on 9 February 2017, RAI’s Form 10-K/A, which was filed with the SEC on 20 March 2017 and RAI’s definitive proxy statement/prospectus, which was filed with the SEC on 14 June 2017 (such filings by RAI, collectively, “RAI SEC filings”).