Altria Group, Inc. to Spin-off Kraft Foods Inc. |
Distribution Effective on March 30, 2007
NEW YORK--(BUSINESS WIRE)--Jan. 31, 2007--The Board of Directors
of Altria Group, Inc. (NYSE: MO) today voted to authorize the spin-off
of all shares of Kraft Foods Inc. (NYSE: KFT) owned by Altria to
Altria's shareholders.
The distribution of the approximately 89% of Kraft's outstanding
shares owned by Altria will be made on March 30, 2007, to Altria
shareholders of record as of 5:00 p.m. Eastern Time on March 16, 2007
(the "record date").
Altria will distribute approximately 0.7 of a share of Kraft for
every share of Altria common stock outstanding as of the record date,
based on the number of Altria shares outstanding on that date. Altria
shareholders will receive cash in lieu of fractional shares for
amounts of less than one Kraft share. The exact distribution ratio
will be determined on the record date.
"I am extremely pleased to announce the spin-off of Kraft today, a
major step in our commitment, announced more than two years ago, to
deliver superior shareholder value," said Louis C. Camilleri, Altria
Chairman and Chief Executive Officer. "I believe that an independent
Kraft will enjoy enhanced flexibility to grow its business and be in a
substantially stronger position to create enduring shareholder value."
Rationale for Spin-Off
The separation of Altria and Kraft will benefit both parties and
will achieve the following benefits:
-- Enhance Kraft's ability to make acquisitions, including by
using Kraft stock as acquisition currency, to compete more
effectively in the food industry;
-- Allow management of Altria and Kraft to focus more effectively
on their respective businesses and improve Kraft's ability to
recruit and retain management and independent directors;
-- Provide greater aggregate debt capacity to both Altria and
Kraft; and
-- Permit Altria and Kraft to target their respective shareholder
bases more effectively and improve capital allocation within
each company.
Altria has been advised that a "when issued" public market for
Altria common stock will begin some time before the record date on the
New York Stock Exchange (NYSE) and continue through the distribution
date under the symbol "MO wi." "When issued" refers to buying Altria
shares without the Kraft portion.
Any holder of Altria common stock who sells shares of Altria
(which currently trades on the NYSE under the symbol "MO") in the
"regular way" market on or before the distribution date may be selling
the entitlement to receive shares of Kraft common stock in the
spin-off. Holders of Altria common stock are encouraged to consult
with their financial advisors regarding the specific implications of
selling Altria common stock on or before the distribution date.
Immediately following the distribution of Kraft shares, Altria
intends to adjust its dividend so that Altria's shareholders who
retain their Kraft shares will receive, in the aggregate, the same
dividend amount that existed before the transaction. As in the past,
all decisions regarding future dividend increases will be made
independently by the Altria Board of Directors and the Kraft Board of
Directors, for their respective companies.
Altria has received an opinion of counsel that the spin-off will
be tax-free to Altria and its shareholders for U.S. federal income tax
purposes, except in respect of cash received in lieu of fractional
share interests. No governmental or IRS approval is required to
complete the transaction.
Conversion of Class B Shares
Prior to the distribution, Altria will convert its Class B shares
of Kraft common stock, which carry 10 votes per share, into Class A
shares, which carry one vote per share. Following the distribution,
only Class A common shares of Kraft will be outstanding. Altria will
not own any shares of Kraft following the spin-off. Kraft is presently
a publicly traded company, with shares listed under the symbol "KFT"
on the NYSE.
Webcast
A conference call with members of the investment community and
news media will be webcast today at 1:00 p.m. Eastern Time. Access is
available at www.altria.com. An archived copy of the webcast will be
available until 5:00 p.m. Eastern Time on April 2, 2007.
Altria.com Website
Additional information about the Kraft spin-off, including answers
to frequently asked questions (FAQs) will be available in a special
section of the Altria website beginning at about 12:00 noon Eastern
Time today at www.altria.com/Kraftspinoff.
Information Statement
On or about March 20, 2007, Altria will mail an Information
Statement to all shareholders of Altria common stock as of the record
date. The Information Statement will include information regarding the
procedures by which the distribution will be effected and other
details of the transaction.
No action is required by Altria shareholders to receive their
Kraft common stock, and Altria shareholders will not be required to
surrender any Altria shares or pay anything, other than any taxes due
on cash received in lieu of fractional share interests.
Registered holders of Altria common stock who are entitled to
receive the distribution will receive an account statement reflecting
their ownership of Kraft common stock. For additional information,
registered shareholders in the U.S. or Canada should contact Altria's
transfer agent, Computershare Trust Company by email at
altria@computershare.com, or by phone at 1-866-538-5172. Outside the
U.S. and Canada, please call 1-781-575-3572.
Holders of Altria common stock who hold their shares through a
broker, bank or other nominee will have their brokerage account
credited with the Kraft common stock. For additional information,
those holders should contact their broker or bank directly or call
Altria's information agent, D.F. King & Co., at 1-800-290-6431.
Altria Group, Inc. Profile
As of December 31, 2006 Altria Group, Inc. owned approximately
89.0% of the outstanding common shares of Kraft Foods Inc. and 100% of
the outstanding common shares of Philip Morris International Inc.,
Philip Morris USA Inc. and Philip Morris Capital Corporation. In
addition, Altria Group, Inc. owned approximately 28.6% of SABMiller
plc. The brand portfolio of Altria Group, Inc.'s consumer packaged
goods companies includes such well-known names as Kraft, Jacobs, L&M,
Marlboro, Maxwell House, Nabisco, Oreo, Oscar Mayer, Parliament,
Philadelphia, Post and Virginia Slims. Altria Group, Inc. recorded
2006 net revenues of $101.4 billion.
Trademarks and service marks mentioned in this release are the
registered property of, or licensed by, the subsidiaries of Altria
Group, Inc.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements that
involve a number of risks and uncertainties and are made pursuant to
the Safe Harbor Provisions of the Private Securities Litigation Reform
Act of 1995. The following important factors could cause actual
results and outcomes to differ materially from those contained in such
forward-looking statements.
Altria Group, Inc.'s consumer products subsidiaries are subject to
changing prices for raw materials; intense price competition; changes
in consumer preferences and demand for their products; fluctuations in
levels of customer inventories; the effects of foreign economies and
local economic and market conditions; unfavorable currency movements
and changes to income tax laws. Their results are dependent upon their
continued ability to promote brand equity successfully; to anticipate
and respond to new consumer trends; to develop new products and
markets and to broaden brand portfolios in order to compete
effectively with lower-priced products; to improve productivity; and
to respond effectively to changing prices for raw materials.
Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA and
Philip Morris International) continue to be subject to litigation,
including risks associated with adverse jury and judicial
determinations, and courts reaching conclusions at variance with the
company's understanding of applicable law and bonding requirements in
the limited number of jurisdictions that do not limit the dollar
amount of appeal bonds; legislation, including actual and potential
excise tax increases; discriminatory excise tax structures; increasing
marketing and regulatory restrictions; the effects of price increases
related to excise tax increases and concluded tobacco litigation
settlements on consumption rates and consumer preferences within price
segments; health concerns relating to the use of tobacco products and
exposure to environmental tobacco smoke; governmental regulation;
privately imposed smoking restrictions; and governmental and grand
jury investigations.
Altria Group, Inc. and its subsidiaries are subject to other risks
detailed from time to time in its publicly filed documents, including
its Quarterly Report on Form 10-Q for the period ended September 30,
2006. Altria Group, Inc. cautions that the foregoing list of important
factors is not complete and does not undertake to update any
forward-looking statements that it may make.
Contacts for Additional Information:
-- If you own Altria shares through a broker or bank ("Street
Name" shares) please contact your financial institution directly or
call D.F. King & Co. at 1-800-290-6431.
-- If you own shares directly with Altria ("Registered" shares)
please contact Computershare at 1-866-538-5172 in the U.S. or Canada.
Outside the U.S. and Canada, please call 1-781-575-3572 or by email at
altria@computershare.com.
-- If you would like to receive a hard copy of this news release
or the Information Statement when it becomes available, please contact
Altria's Shareholder Publications Center at 1-800-367-5415.
--Answers to frequently asked questions (FAQs) and other
information are available at www.altria.com/Kraftspinoff.
Media Contacts:
-- Members of the news media seeking additional information should
contact Altria media relations at 917-663-2144.
-- Altria's corporate B-roll is accessible to members of the news
media at www.thenewsmarket.com/altria.
CONTACT: Media:
Altria Media Relations, 917-663-2144
SOURCE: Altria Group, Inc.
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