|
CNBC'S MOST SHARED
- 'We're in the Middle of a Crash': Black Swan
- The Rising Mountain of Debt May Be the Next Crisis
- Latvian Banker Taking Souls as Collateral
- SEC May Reinstate Rules for Short-Selling Stocks
- Cuddle Parties Heat Up
- Your First Move For Monday July 6th
- The Worst Expected 2010 State Budget Gaps
- Malaysia PM Speaks to CNBC
- NY City Apartment Sales Down More Than 50%
- Alaska Governor Sarah Palin Will Resign
- The Rising Mountain of Debt May Be the Next Crisis
- North Korea Fires 7 Missiles Off East Coast
- Palin's Resignation May Hurt Her Future
- For Banks, Wads of Cash and Loads of Trouble
- SEC May Reinstate Rules for Short-Selling Stocks
- For Australian Winemakers, More Turns Out to Be Less
- Vatican Runs Deficit Amid Economic Crisis
- Earnings Season: A Likely Game-Changer
- Slideshow: Best-Selling Fourth of July Fireworks
- Fireworks At Pharma's Market
- Value of Warren Buffett's Annual Gift to Gates Foundation Falls Along With Berkshire's Stock
- Michael Jackson: The Music And The Money
- Five Stock Picks for This Market
- Realities of the New Obama Refis
- Weak Dollar Means Gold at $1,040: Strategist
- Court Ruling Could Mean Trouble for TiVo
- Lance, Please Back Out Of Tour
- TeleMedicine Gets An Apple App Store Facelift
Altria Group is in advanced talks to buy UST, the maker of the popular Skoal and Copenhagen smokeless tobacco brands, for more than $10 billion, people with close knowledge of the negotiations said late Thursday. The terms could not be learned.
![]() |
The acquisition, which is at a delicate state and could still fall apart, would be Altria’s [MO
Loading...
()
] first major purchase since the company split in March, spinning off Philip Morris International to become an independent company focused on the overseas tobacco business and giving the Altria name to Philip Morris USA.
People involved in the transaction were planning to work through the weekend to complete the deal as soon as Monday, these people said, but they suggested that the release of the news could speed up the process.
![]() |
CNBC.com |
“We don’t comment on any speculation that’s out there,” said David M. Sylvia, Altria’s director of media affairs. Officials at UST [UST
Loading...
()
], which is based in Stamford, Conn., did not return messages.
Speculation about the deal swirled on Thursday after UST’s chief executive, Murray S. Kessler, abruptly withdrew from an analysts’ conference, prompting a surge in the share price and heavy options trading.
By the end of the day, after UST said that there had been a scheduling conflict, company shares fell back. Stock in UST, formerly the United States Tobacco Company, closed down 4 cents, at $54 a share, while Altria fell 60 cents, to $20.66 a share.
UST also owns Ste. Michelle Wine Estates, which is one of the 10 largest producers of premium wines in the United States. The company has a current market capitalization of $8 billion and last year earned $520 million on revenue of $1.95 billion.
Analysts have long been bullish on the deal because of Altria’s weak position in the growing smokeless tobacco market and because huge cost savings are possible by eliminating redundancies between the two companies.
Both have extensive marketing and distribution operations that cater to essentially the same stores. “It’s very logical,” said Christopher Growe, an analyst in St. Louis for Stifel Nicolaus. Smokeless tobacco is one of the few areas of the tobacco business that is still growing, Mr. Growe said, adding that it has increased about 7 percent a year over the last four years.
Altria, which is based in Richmond, Va., and is the nation’s largest cigarette maker, had hoped to use its potent Marlboro brand to create its own successful smokeless tobacco products. It has introduced Marlboro-brand moist smokeless tobacco and snus, which are packets filled with tobacco that are popular in Sweden. Neither product has taken off.
By splitting Philip Morris USA and Philip Morris International into two companies, company officials had hoped to allow the international company to pursue potentially lucrative markets in developing countries without the worries of potential litigation and legislation in the United States.
The company’s strategy in the United States has been clear for some time as cigarettes sales have followed decades of decline. As part of that strategy, Philip Morris USA acquired John Middleton, a maker of cigars and pipe tobacco, last year.
It has opened a research facility in Richmond to create tobacco products that are lower risk than regular cigarettes. The House has already approved legislation that would allow the Food and Drug Administration to regulate tobacco products. The measure, which the White House opposes, is expected to be taken up by the Senate this fall.











