Morning:
13°c
Altria in talks on snuffmaker buy
Nick Goodway, Evening Standard05.09.08
Altria, owner of Marlboro cigarettes maker Philip Morris, is in advanced talks to buy America's biggest snuff company, UST.
The $10billion (£5.67billion) takeover bid could come as early as Monday morning, according to reports today.
As cigarette sales continue to fall in developed economies, Altria is keen to diversify into parts of the tobacco market that are still expanding.
By taking over USt, which owns the leading brands Skoal and Copenhagen, Altria would hold about 60% of the US snuff market which is worth about $3.7 billion a year and growing at about 7% a year. Cigarette sales are falling by around 3.5% a year.
The major rival is reynolds America, which owns Kodiak and Grizzly snuff brands.
USt is currently valued at about $8 billion, which is about one-fifth of Altria's stock market value.
An agreed bid would have to be at a decent premium to the share price.
