According to latest reports, British American Tobacco PLC announced on Tuesday January 17, 2017 that the company is paying $49.4 billion for the 57.8% of Reynolds American, Inc. (NYSE:RAI) that it doesn’t already own.

The company further said it will pay $29.44 in cash and 0.5260 of an ordinary share for each Reynolds’ share, prizing its U.S. peer at above $85 billion that will also make the world’s largest listed tobacco company by revenue and market value.

This announcement arrives after BAT statement in October that it had made an offer for Reynolds valued at $56.50 a share, or about $47 billion for the stake it didn’t own. Tuesday’s settled price marks a premium of 26% over the closing price of Reynolds the day before BAT made its early announcement last year.

The British giant company, which owns Dunhill, Lucky Strike and Pall Mall among its brands, predicts at least $400 million in cost cuts from the deal, which is likely to profit both earnings and dividends as soon as first year following the deal.

Meanwhile BAT has always been a shareholder in Reynolds since it took on its present form in 2004, and its stake accounts for a hefty chunk of BAT’s profits.

The transaction is the latest to signify the value the U.S. holds for a dwindling global tobacco industry.

After years of keeping themselves away from the U.S. because of increasing civil suits, international tobacco companies are returning as they face weakening cigarette volumes and expanding legislation around the globe.

Further than tobacco, a combined British American Tobacco plc and Reynolds American (NYSE:RAI) will also be the world’s biggest player in so-called next-generation products, mainly e-cigarettes and other similar products.