London-listed company will pay $49.4bn for the 57.8% stake in US giant Reynolds it does not already own.
Top flight shares endure light trading for second day with traders going into weekend prepared to hold their positions.
Reynolds is seeking an improved offer to merge with BAT, reports say.
Ratings agency Moody's says BAT's bid for Reynolds would result in significant deterioration of its credit metrics.
Market rises on plans for tobacco deal that will bring together such key brands as Lucky Strike, Camel and Rothmans.
BAT already owns 42.2% of Reynolds, the second-largest tobacco company in the United States.
British American Tobacco, Unilever, Diageo, Sage and Next are the top rated companies.
Market lifts after construction sector in August bounces back from a seven-year low the month before.
World's second biggest tobacco company posts rise in sales volumes, but counts cost of foreign exchange fluctuations
The FTSE was subdued on the back of poor trade and consumer confidence data.
Bats Europe launches 18 new indices covering a number of different sectors as it aims to challenge FTSE 100.
The Universities Superannuation Scheme pension fund has invested £211m in the tobacco industry.
Tobacco manufacturer's revenue up 1.7% in first quarter but warns of 7% currency headwind on full-year profit.
GPs will be able to prescribe e-Voke electronic cigarettes to help smokers quit.
Civil servants and senior politicians were paid off, according to ex-employees and court documents.
BAT's first-quarter revenue rose 1.7% at constant exchange rates, trailing the 3.5% median growth estimate forecast.
Revenue fell by almost a tenth for the Benson & Hedges Maker
Vype e-cigarettes advert leaves out any reference to 'smokers'