TOBACCO combine Gallaher is to return to the London stock market next year through a scrip spin off by holding company American Brands on terms expected to place a value of more than £2.5 billion sterling on the UK's leading cigarette manufacturer.

The Benson and Hedges and Silk Cut brands manufacturer is the number one tobacco company in the Republic, holding a 43 per cent market share during the first six months of this year. It employs about 1,000 at Lisnafillan, near Ballymena, and a further 300 at Tallaght.

Next year's Gallaher flotation by way of a share issue to American Brands shareholders will follow the recent £2.2 billion float of Imperial Tobacco through a similar spin off by the Hanson group.

American Brands' de-merger of Gallaher is intended to re-establish it as an independent quoted company over 20 years since the US group paid £320 million to acquire the business.