Imperial Tobacco revealed plans today for a possible €11.5 billion offer for European rival Altadis.
The move, described as a "friendly approach" by Imperial Tobacco, comes amid recent consolidation in the sector. A successful bid would create a €20 billion-plus tobacco giant.
The Bristol-based company said: "Discussions are at a very early stage and there can be no certainty this approach will lead to an offer."
The move left Imperial Tobacco's shares more than 7 per cent higher today after Altadis, which makes Gauloise cigarettes, received the approach yesterday evening.
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Imperial's interest comes after Gallaher shareholders backed a €7.5 billion bid from Japan Tobacco last week.
