Japan Tobacco Buys Gallaher

In a deal that proves that tobacco is still plenty big business, Japan Tobacco buys out Britain's Gallaher.

Fitch Ratings said a combination of the two companies would create a group with annual earnings of around $5.2 billion and catapult it to a position of market leader in the high-growth Russian market, with a share of almost 35 percent. That would be ahead of British-American Tobacco's 23 percent and Altria-owned Philip Morris International's 27 percent in the world's second-largest tobacco market.

As with all major tobacco companies, Japan Tobacco is experience declining smoking rates in modernized nations.