BAT said the proposal would give it "a leading position in the US tobacco market" and "a significant presence in high growth emerging markets across South America, Africa, the Middle East and Asia, together with the most attractive developed markets".
And the combined group would have a "world class pipeline" of so-called next generation products, like e-cigarettes, in a fast-growing part of the market, it added.
The cash-and-shares offer would see BAT purchase the 57.8-per cent of Reynolds American that it does not already own.
The bid, pitched at $56.50 per Reynolds share, was a 20-percent premium on Thursday's close and will comprise some $20 billion in cash and $27 billion in BAT shares.
BAT, which already holds a 42.2-per cent stake in Reynolds American, added that it had not yet held formal talks due to US securities laws.
The London-listed company noted that Reynolds' 2015 purchase of US tobacco behemoth Lorillard, the manufacturer of the Blu e-cigarette, had "strengthened" the US group.
"The proposed merger of our two great companies
is the logical progression in our relationship and offers all shareholders a stake in a stronger, truly global tobacco and Next Generation Products company," said BAT chief executive Nicandro Durante.
"BAT is proud of its track record of consistent delivery for shareholders and this transaction would further strengthen that delivery in the future.
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