With tobacco firms under pressure from health groups in developed economies and increasingly popular electronic cigarettes, a merger of this size would help them consolidate costs and resist competition from Asia, analysts say. The merger "is the logical progression in our relationship and offers all shareholders a stake in a stronger, truly global tobacco and next generation products company," BAT Chief Executive Nicandro Durante said, referring to the firms' expansion into electronic cigarettes. Tobacco companies are particularly keen to expand in developing countries to make up for weaker sales in Europe and the U.S., where public awareness about the health hazards of smoking has grown.