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RICHMOND, Va. -- Altria Group, parent to cigarette maker Philip Morris, is in advanced talks to buy UST, manufacturer of Skoal and Copenhagen smokeless tobacco brands, for more than $10 billion, people with close knowledge of the negotiations told The New York Times.
While the terms of the deal were not disclosed, the acquisition is rumored to be in a fragile state and could dissolve, the report stated. Such a purchase would be the first for Altria since the company spun off its Philip Morris International unit in March.
Sources told the newspaper that officials involved in the transaction were planning to work through the weekend to complete the deal as soon as today, according to the report.
"We don’t comment on any speculation that’s out there," David M. Sylvia, Altria’s director of media affairs, told the Times. Officials at UST, based in Stamford, Conn., did not return messages to the paper.
UST, which also owns Ste. Michelle Wine Estates, one of the 10 largest producers of premium wines in the U.S., has a current market capitalization of $8 billion, and last year earned $520 million on revenue of $1.95 billion, according to the report.
"It’s very logical," Christopher Growe, an analyst in St. Louis for Stifel Nicolaus, told the newspaper. Smokeless tobacco is one of the few areas in the tobacco industry that is still growing, he said.