Altria Announces Spin-off of Philip Morris International Inc.

January 30, 2008 - Altria Announces Spin-off of Philip Morris International Inc.. Altria Group, Inc. today issued its 2007 full-year and fourth-quarter results and announced the spin-off of Philip Morris International Inc. (PMI). Louis C. Camilleri, Chairman and Chief Executive Officer of Altria. “The PMI spin-off and related actions position our international and domestic tobacco businesses for future success as stand-alone companies with unique and formidable strengths, including leading brands, strong cash flow, experienced leadership and solid growth prospects.” The Board of Directors of Altria voted today to authorize the spin-off of 100% of the shares of Philip Morris International (PMI) to Altria’s shareholders - the distribution will be made on March 28, 2008. Altria’s Board of Directors and management determined that PMI’s separation from Altria will enhance growth and shareholder value by providing the following benefits: An improved focus on the different market dynamics, competitive frameworks, challenges and opportunities that Altria and PMI face; A more optimal and efficient capital allocation to enhance shareholder value, coupled with greater financial flexibility, including an increase in the combined debt capacity of Altria and PMI; Greater transparency leading to the elimination of the sum-of-the-parts discount under which Altria’s common stock has typically traded; A significant reduction in corporate overheads, including the closure of Altria’s corporate headquarters in New York; The creation of a potential acquisition currency in the form of more focused equity that neither of Altria’s tobacco subsidiaries has had available prior to the spin-off; and A tighter alignment of compensation and rewards with the performance of each entity. Louis C. Camilleri will serve as Chairman of the Board and Chief Executive Officer of PMI following his resignation from posts at Altria. Michael E. Szymanczyk, will serve as Chairman of the Board and Chief Executive Officer of Altria. Tomorrow Altria Board Expected to Announce Decision to Split Philip Morris International (PMI) From Philip Morris USA..
Read more...

With Shrinking America Cigarette Sales Philip Morris USA More Dependent on the Smokeless Tobacco Market..

January 29, 2008 - Altria Group Inc., the biggest U.S. tobacco company, is becoming more dependent on shrinking American cigarette sales for profit as the spinoff of its international division approaches. U.S. cigarette sales are falling, pushing the maker of the top-selling Marlboro brand to invest in the $3.7 billion smokeless tobacco market, which is growing 6 percent a year (total price/value segment continues to drive overall category growth in moist snuff not premium - TW). Chief Executive Officer Louis Camilleri may announce tomorrow plans to split off the international unit in March 2008, turning up pressure on its Philip Morris USA to expand beyond cigarettes. U.S. producers shipped 6.8 percent fewer cigarettes in December than a year earlier, twice the rate of decline for all of 2007. Higher prices and smoking bans may be accelerating the drop, said Judy Hong, a Goldman Sachs Group Inc. analyst. (Altria U.S. Sales Languish as Overseas Spinoff Nears (Update2)) by Chris Burritt, Bloomberg.com, 1/29/2008) Some related news briefs: Marlboro MST/Marlboro SNUS - PM USA Trying to Paint a Rosie Picture.., UST, Inc. NOT Worried About New Moist Snuff Entry - Marlboro MST.. and Philip Morris USA (PM) continues to stumble in the smokeless tobacco arena..

Read more...

Tomorrow Altria Board Expected to Announce Decision to Split Philip Morris International (PMI) From Philip Morris USA..

January 29, 2008 - Tomorrow Altria Board Expected to Announce Decision to Split Philip Morris International (PMI) From Philip Morris USA.. The Altria board is expected to approve a long-awaited decision to split PMI from Philip Morris USA. “This is something that has been in the works for years,” said Bonnie Herzog, an analyst at Citigroup. “To me, it’s a done deal.” The move would free the tobacco giant's international operations of legal and public-relations headaches in the U.S. that have hindered its growth. “It allows PMI to become much more free to pursue growth opportunities,” Ms. Herzog said. The Altria Group would probably remain as a holding company for Philip Morris USA and the company’s 29 percent stake in SABMiller, the beer company, she said. Some of the new cigarette products include: Marlboro Intense - shrunken down by about a half inch, and offers smokers seven potent puffs apiece, versus the average of eight or so milder draws. The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don't always finish a full-size cigarette. With the Heatbar smokers insert specially-designed cigarettes into the device that releases 90% less smoke into the atmosphere than a traditional cigarette. PMI's launch of TBS ("Tobacco Block System") in Germany, where roll-your-own tobacco is taxed at significantly lower rates. Recent Marlboro launches include Marlboro Mix 9, a high-nicotine, high-tar cigarette introduced in Indonesia last July. PMI is poised to export the clove-infused Mix 9 (Kretek) to other Southeast Asian markets as soon as this year. Marlboro Filter Plus is being sold in South Korea, Russia, Kazakhstan and Ukraine. It touts a special filter comprised of carbon, cellulose acetate and tobacco that claims to lower the tar level while giving smokers a smoother taste. Marlboro Wides an extra-thick cigarette whose package flips open from one side. International cigarette sales are relatively flat. Still, PMI feels it has much more room for growth because it has only about 15 percent of the international market. PMI generated $48.26 billion in net revenue in 2006 compared with $18.47 billion at PM Morris USA. ( "Altria Board to Consider a Spinoff Overseas" by Andrew Martin, The New York Times, 8/25/2007) Some related news briefs: January 24, 2008, December 10, 2007 and September 28, 2007. Also Philip Morris (PM) to close N.C. cigarette plant...

PMI new products slideshow.
Read more...

Marlboro MST / Marlboro SNUS - Philip Morris USA (PM) Trying to Paint a Rosie Picture..

January 28, 2008 - While tobacco analyst Nik Modi of UBS Investment Research shows the test of Marlboro moist smokeless tobacco in Atlanta is slowly slipping down hill, Philip Morris USA says it is preparing to expand the test market to additional counties in the greater Atlanta area (product will arrive over the next couple of weeks). David Sutton, a spokesperson for PM said, “We’ve been really pleased with the initial reaction to the product by adult moist-smokeless-tobacco consumers in the Atlanta test market." Initially with the MST launch Modi was postive but after 2-months things have changed, his comment: “Marlboro MST’s share position has virtually been cut in half since its launch period.” Further, Modi said MST products from United States Smokeless Tobacco Co. (UST) were seeing a resurgence following an initial drop in share. Marlboro SNUS, currently in test market in the Dallas/Fort Worth area, builds on the brand equity of Marlboro cigarettes and comes in four varieties: Rich, Mild, Mint and Spice. "We are pleased with the initial reaction by adult consumers, wholesalers and retailers to Marlboro Snus in the Dallas/Fort Worth test market and look to build upon the learnings from that market, as well as our experience with Taboka, in Indianapolis," said Roy Anise, vice president of brand management smokeless for PM. (" Marlboro MST Test Grows PM USA “pleased” with results; analyst says share has dropped" by Steve Holtz, CSP Newsletter, 1/28/2008) Related news briefs: UST, Inc. NOT Worried About New Moist Snuff Entry - Marlboro MST; Philip Morris USA (PM) continues to stumble in the smokeless tobacco arena..; Philip Morris USA (PM)To Also Test Marlboro Snus In Indianapolis... Read more...

Imperial Tobacco successfully concludes acquisition of Altadis..

January 28, 2008 - Gareth Davis, CEO of Imperial Tobacco, said: "I am delighted to announce the successful conclusion of our acquisition of Altadis. This is a significant milestone for Imperial Tobacco, consolidating our position and enhancing our platform for continued and sustainable growth."

Imperial Tobacco also intends to launch a tender offer for the shares of logistics company Logista, which are not already owned by Altadis, for a price of E52.50 per Logista share. This values the outstanding Logista shares at a total of approximately E910 million (excluding treasury shares).

Altadis is the result of a 1999 merger between Tabacalera, the former Spanish tobacco company snd SEITA, the former French tobacco monopoly.

Reference: Imperial Tobacco successfully concludes acquisition of Altadis, Datamonitor, 1/28/2008.
Read more...