Union Of RJR, Nabisco Dissolves; Tobacco's Troubles Had Hurt Stock of Camel, Oreo Maker
RJR Nabisco Holdings Corp., plagued by lawsuits and uncertainty in the tobacco business, said yesterday that it will sever its cigarette unit from its Nabisco cookie and cracker operations, marking the end of a tumultuous corporate marriage.</br></br>The move, long urged by a group of dissident shareholders, underscores how the legal and political battles that engulfed tobacco in the past decade have left one of the United States' earliest industries with few fans on Wall Street. Despite the booming stock market, the company's stock has lost more than half its value since 1991.</br></br>Now, in hopes that investors will refocus on its core food products -- which include such brand names as Oreo cookies and Ritz crackers -- the company that produces Camel, Salem and Winston said it will spin off its domestic tobacco business to current shareholders and sell its international cigarette holdings to a Japanese firm for about $8 billion.</br></br>The news did not immediately improve investors' opinion of the company's value. RJR Nabisco's stock initially jumped 5 percent on the news but drifted down during the day, closing up only 12 1/2 cents at $28.75. "Reynolds served up something and investors kind of yawned at it," said Gary Black, a tobacco analyst with Sanford C. Bernstein & Co.</br></br>The company said the complex deal will not shield it from outstanding liabilities in the tobacco business.