U.S. tobacco company Altria Group said on Sept. 8 it would buy UST, owner of smokeless tobacco brands Skoal and Copenhagen and a wine company, in a cash-and-debt deal worth $11.7 billion.
Altria, the largest U.S. cigarette maker whose best-known brand is Marlboro, said it is offering $69.50 in cash per share, representing a 28.9% premium based on the UST share price average of the past three months.
"The combination of Altria and UST creates the premier tobacco company in the United States with leading brands in cigarettes, smokeless tobacco and machine-made large cigars," said Michael Szymanczyk, Altria's CEO said. "We are excited about this strategic and financially attractive acquisition as it will enhance our ability to deliver superior shareholder return that is expected to exceed our 12% goal," he said.
UST Inc. is a holding company for its principal subsidiaries: US Smokeless Tobacco Co.and Ste. Michelle Wine Estates, which produces wines in Washington state, Oregon and California. UST has a market value of $8 billion and reported a 2007 net profit of about $500 million on revenue of $1.9 billion.
The takeover would be Altria's first acquisition since it sold its Philip Morris International subsidiary in March.
Copyright Agence France-Presse, 2008
