Altria to Acquire John Middleton Inc.

November 2, 2007 - - Comments of Michael E. Szymanczyk, chairman and CEO of PM USA, Richmond, Va. "This acquisition, which takes place on the eve of Altria Group Inc.’s intended restructuring, is being undertaken to enhance our long-term growth momentum in the U.S. market and create shareholder value. The acquisition is both strategically compelling and financially attractive. It fits squarely with our announced strategy to grow our U.S. tobacco business beyond cigarettes and complements our recent initiatives in the smokeless category.” Over the 2003 to 2007 period, operating revenues and operating income are estimated to have grown at compound annual rates of approximately 10% and 13%, respectively, driven by the strength of the Black & Mild cigar brand franchise. Szymanczyk added, “The plan is to accelerate the Black & Mild brand’s market share growth momentum in the years ahead by leveraging the expertise and capabilities of both John Middleton Inc. and PM USA.” Black & Mild, a cigar made with a proprietary blend of pipe tobacco, enjoys strong brand equity, high brand awareness and solid volume and share growth momentum, Altria said. The brand is the second-largest selling machine-made large cigar in the United States, it added, with a retail market share of approximately 23%, and the Black & Mild five-cigar pack is the best-selling large machine-made cigar package in the United States, said Altria, citing data through June 2007 from Information Resources Inc. (IRI). It is particularly strong in the U.S. South and Southeast, which together account for approximately 55% of segment volume. (CSP Daily News) C-store owners tell us these cigars are so popular it's hard to keep enough stock on-hand.( Click on image to enlarge..