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American Tobacco Company

American Tobacco Company
Subsidiary
Industry Tobacco farming and manufacturing
Fate Restructuring and sale
Founded 1890 (1890) in Durham, North Carolina
Founder J. B. Duke
Defunct 1994 (1994)
Headquarters Durham, North Carolina, U.S.
Area served
Worldwide
Products Cigarettes and related tobacco products
Parent American Brands, Inc.

The American Tobacco Company was a tobacco company founded in 1890 by J. B. Duke through a merger between a number of U.S. tobacco manufacturers including Allen and Ginter and Goodwin & Company. The company was one of the original 12 members of the Dow Jones Industrial Average in 1896. The American Tobacco Company dominated the industry by acquiring the Lucky Strike Company and over 200 other rival firms. Antitrust action begun in 1907 broke the company into several major companies in 1911.

The American Tobacco Company restructured itself in 1969, forming a holding company called American Brands, Inc., which operated American Tobacco as a subsidiary. American Brands acquired a variety of non-tobacco businesses during the 1970s and 1980s, and sold its tobacco operations to Brown & Williamson in 1994. American Brands subsequently renamed itself Fortune Brands.

James Buchanan Duke’s entrance into the cigarette industry came about in 1879 when he elected to enter a new business rather than face competition in the shredded pouched smoking tobacco business against the Bull Durham brand, also from Durham, North Carolina.

In 1881, two years after W. Duke Sons & Company entered into the cigarette business, James Bonsack invented a cigarette-rolling machine. It produced over 200 cigarettes per minute, the equivalent of what a skilled hand roller could produce in one hour, and reduced the cost of rolling cigarettes by 50%. It cut each cigarette with precision, creating uniformity in the cigarettes it rolled. Public stigma was attached to this machine-rolled uniformity, and Allen & Ginter rejected the machine almost immediately.


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