The deals are the latest in BAT's push to expand in the fast-growing e-cigarette business, where the world's second-biggest cigarette maker has said it sees huge potential.

BAT, whose conventional cigarette brands include Dunhill, Lucky Strike and Pall Mall, already sells a line of e-cigarettes called Vype in the UK.

CHIC Group has 800 points of sale in Poland, a dedicated e-liquids production facility, a modern research and development centre, and leading Polish e-cigarette brands.

The financial details of the deal were not disclosed.

E-cigarettes allow users to inhale nicotine-laced vapour but contain no tobacco. Most of the chemicals that cause smoking-related diseases are absent.

BAT said its arrangement with RJ Reynolds provides a framework for collaboration and cross-licensing of the parties' vapour product technologies up to the end of 2022.

BAT shares were down 1.7 percent at 3498 pence by 1022 GMT. The FTSE-100 index was down 2.2 percent.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Anupama Dwivedi and Ted Kerr)

Stocks treated in this article : Reynolds American, Inc., British American Tobacco plc