U.S. Cigar manufactures cigars in both Danlí, Honduras and Santiago Real in the Dominican Republic, and grows tobacco in Honduras on its 1,300-acre farm in the Talanga Valley. General Cigar will also take on the marketing and manufacturing of the Helix, Astral, and Don Tomás brands, in addition to U.S. Cigar's significant private label business.

Edgar Cullman, Jr., General Cigar's c.e.o. comments, "We are excited about adding the U.S. Cigar brands to our portfolio of premium, hand-crafted cigars and believe that this addition furthers our leadership position within the premium cigar industry."

General Cigar will build on the historic equity of these brands with a dedicated marketing effort.

In acquiring U.S. Cigar Sales, General Cigar takes another step in its assembly of leading manufacturers under the General Cigar umbrella.

Under the merger agreement, a new publicly traded holding company called Reynolds American Inc. will be formed. In addition, Reynolds American Inc. will pay $400 million in cash to acquire Lane Limited, which manufactures several cigar, roll-your-own and pipe tobacco brands and distributes Dunhill tobacco products.

The FTC commissioners' unanimous vote marked the completion of the antitrust review process. The stock-and-cash transaction, announced in October, still needs approval from the Securities and Exchange Commission and RJR shareholders. The companies, which considered FTC approval to be the biggest hurdle, expect the transaction to close by the end of July.

"We estimate the combination of the companies will generate at least $500 million in synergies once full integration is complete," said Andrew J. Schindler, chairman and c.e.o. of R.J. Reynolds Tobacco Holdings. Schindler estimates the timeframe for full integration will be about 18 to 24 months after the deal closes.

"The creation of Reynolds American will give the group a 42 percent share in a stronger and more sustainable business, while improving both our earnings per share and our cash flow in the first full year following completion," said Martin Broughton, chairman of British American Tobacco.

The stay means that General Cigar is permitted to continue marketing and selling Cohiba cigars while the appeal is pending.

"We are obviously pleased with the Second Circuit's decision," said Edgar Cullman Jr., president and chief executive officer of General Cigar, adding, "Stays are not usual in trademark cases, so this does give us encouragement."

General Cigar received its first registration of the Cohiba trademark in the U.S. in 1981, and obtained an updated registration in 1995. The company has been selling its Dominican-made Cohiba cigar in the United States for over two decades, with a major relaunch of the brand in 1991 and additional line extensions introduced since then.

Under the deal, Synergy Brands would divest itself of 100 percent of the operations by selling its interest in Gran Reserve Corporation to a currently trading independent public company. The deal is potentially valued at $4.6 million for Synergy since it will retain a majority stake in the new company, which would be called Gran Reserve Corporation. The parties hope to make the transaction effective on or before July 31, 2004, subject to due diligence.

"We believe that our Gran Reserve entity is ready to stand on its own as a separate public company," said Synergy c.e.o. Mair Faibish, adding "The business has achieved good revenue growth in the past several years, and the addition of Cigars Around the World to the portfolio of companies last year has added to the strength of this segment." Bill Rancic, founder of Cigars Around the World and the winner of NBC television's hit reality program, "The Apprentice," will serve as chairman of the new public entity.

The proposed transaction would provide Gran Reserve with more than one million dollars of additional cash that will be used to fund its expansion. "As a separate company, GRC can accelerate the growth of our business by expanding our marketing activities to promote sales and through acquisitions that are synergistic to our cigar operations," says Fabish.