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|B.A.T Shares Rise after U.S. Tobacco Bill Killed
London, June 18 (Bloomberg) -- B.A.T Industries Plc's shares rose after the U.S. Senate voted to reject a tobacco bill that cigarette companies said would have bankrupted them.
Shares rose 9 pence to 580p after the Republican-led Senate late yesterday killed the bill on a procedural vote, ending four weeks of debate. U.S. cigarette companies had waged a campaign against the measure, which would have increased regulation, limited advertising, and cost them some $516 billion over 25 years.
B.A.T, the world's second largest cigarette maker whose U.S. unit Brown & Williamson Tobacco Corp. would have been affected by the bill, has seen its share price rocked in recent months by uncertainty over U.S. lawsuits brought by smokers and health insurance companies. Analysts said tobacco legislation is likely to become an issue again in the future.
That bill is dead but the issue is not buried,'' said Andrew Darke, an analyst at Williams de Broe.
Indeed, Democrats in the Senate said they would push to pass some kind of legislation to curb smoking, particularly by children. President Bill Clinton and others in the anti-smoking lobby blamed the tobacco companies' multimillion-dollar advertising campaign for the bill's failure. The bill's opponents, including Mississippi Republican Trent Lott, said the bill had become a big government, tax-and-spend measure.
In New York, shares in Philip Morris Cos., the world's biggest tobacco company, were up 1 9/16 to $40. RJR Nabisco Holdings Corp.'s share rose 11/16 to $25.
The bill, sponsored by Arizona Republican Senator John McCain, effectively replaced the tobacco industry's $368.5 billion agreement with state attorneys-general last June to settle their legal liabilities.
Because the McCain bill was more costly and offered less legal protection than the companies wanted, they opted to reject the agreement and return to fighting the cases against them in court.
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