Camel cigarettes maker Reynolds American Inc (RAI) said it would buy rival Lorillard Inc (LO) in a cash-and-stock deal valued at $27.4 billion, including net debt.

Reynolds offered $68.88 per Lorillard share, representing a premium of 2.5 percent to Lorillard's Monday closing.

Reynolds also said it would sell its KOOL, Salem, Winston, Maverick and blu eCigs brands and other assets to Imperial Tobacco Group for $7.1 billion in cash.