updated 6/22/2004 9:20:38 PM ET 2004-06-23T01:20:38

R.J. Reynolds Tobacco Co. and Brown & Williamson Tobacco Corp. are clear to merge, the Federal Trade Commission said Tuesday, giving the green light to a marriage of the nation’s No. 2 and No. 3 tobacco companies.

The FTC voted unanimously to close its investigation of the proposed $2.6 billion cash and stock transaction, saying the merger is unlikely to lessen competition in the U.S. cigarette market.

The merger “will enable us to achieve tremendous efficiencies, and will greatly enhance the combined companies’ ability to compete effectively in the U.S. marketplace,” RJR chief executive Andrew J. Schindler said in a news release.

The merger, announced in October, will create a tobacco giant that will produce one of every three cigarettes in the United States. Winston-Salem-based RJR will hold a 58 percent controlling stake in the new company.

The merger will end Brown & Williamson’s presence in Louisville, Ky., where it has been based since the late 1920s. Company officials have said employees there will either lose their jobs or be offered transfers to North Carolina.

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