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RICHMOND, Va. -- Altria Group Inc., parent company to the largest U.S. cigarette manufacturer Philip Morris USA, completed the $11.7 billion acquisition yesterday of moist smokeless tobacco firm UST Inc.
UST adds the Copenhagen and Skoal brands to Altria’s portfolio, as well as the premium wine brand of Ste. Michelle Wine Estates.
The transaction includes the assumption of approximately $1.3 billion of debt, and with the closing of the transaction, UST common stock shareholders are entitled to receive $69.50 per share in cash for each share held as of Jan. 6, 2009. In addition, with the completion, UST common stock no longer trades on the New York Stock Exchange.
When the deal was announced in early September 2008, Michael E. Szymanczyk, chairman and chief executive officer of Altria said during a conference call, "[The deal] is strategically and financially compelling -- it creates a premiere tobacco platform with premium brands across multiple tobacco categories." He added: "This transaction is consistent with our growth strategy of making disciplined investments in adjacent categories."
In early October, Altria delayed the closing date of the acquisition, as its lenders advised it would be preferable to close the transaction in 2009. The original agreement called for the closing no later than early January 2009, in the event conditions for closing were met prior to the end of 2008, the company stated.