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Reynolds American wins antitrust approval to buy rival Lorillard

WASHINGTON, May 26 (Reuters) - Reynolds American Inc (NYSE: RAI - news) won U.S. antitrust approval on Tuesday for its deal to buy smaller rival Lorillard (NYSE: LO - news) in a deal that would combine the No. 2 and No. 3 U.S. cigarette companies.

The Federal Trade Commission said it would allow the deal to go forward in condition that the companies sell four cigarette brands - Winston, Kool, Salem, and Maverick. They will be purchased by Imperial Tobacco Group PLC.

Reynolds, which makes Camel and Pall Mall cigarettes, said in July it would buy Lorillard, which makes Newport (NasdaqGS: NEWP - news) , for $27.4 billion. (Reporting by Diane Bartz; Editing by Eric Beech)