UST to become a wholly owned subsidiary of Altria..

September 9, 2008 - Altria Group Inc.^** and UST, INC. officially announced yesterday, 9/8/2008 that they have entered into an agreement for Altria to acquire all outstanding shares of UST. The all-cash transaction is valued at approximately $11.7 billion (EUR 8.2 billion), which includes the assumption of approximately $1.3 billion of debt.

According to Michael E. Szymanczyk, Altria’s chairman and chief executive, “The combination of Altria and UST creates the premier tobacco company in the United States with leading brands in cigarettes - Marlboro, smokeless tobacco - Skoal/Copenhagen and machine-made large cigars - Black& Mild.”

Murray S. Kessler, chairman and CEO of UST, will be named vice chair of Altria, reporting directly to Szymanczyk, and will oversee the integration. "I don't think there's any question that both of these companies are doing just fine. But there's also no question [that] when you put them together, the consolidation creates an extraordinary amount of value for consumers and for shareholders. And that's why it's smart to do this. It's not that one can't perform without the other. When you put them together, you can get much more value than when they're apart," Szymanczyk added during the investor call.

Altria prides itself on their high powered sales force, e.g. soon after acquiring John Middleton, Inc. (Black&Mild Cigars) its sales force was cut. It is doubted this will happen with UST.

References: Altria Scoops Up UST - $11.7 billion deal adds moist smokeless tobacco leader to cigarette, cigar stable, CSP Daily News, 9/9/2008. and Altria to buy UST for $10.4 billion, Reuters, 9/8/2008.

** - Altria owns approximately 28.5% of SABMiller (South African Breweries - Miller) plc.