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Why did Altria spin off PMI? |
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Altria's Board of Directors and management believed that the Spin-off would enable each of Altria's international and domestic tobacco businesses to focus exclusively on realizing its own opportunities and addressing its own challenges, thereby building long-term shareholder value. Some of the benefits include an improved focus on the different market dynamics and competitive frameworks, a more optimal and efficient capital allocation, a greater financial flexibility, a greater transparency leading to the elimination of the sum-of-the-parts discount under which Altria's stock has typically traded, a reduction in corporate overhead, the creation of a potential acquisition currency in the form of a more focused equity, and a tighter alignment of compensation and rewards with the performance of each entity.
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Were any approvals required for the Spin-off? |
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The spin off of PMI was subject to the receipt of a favorable ruling from the U.S. Internal Revenue Service (IRS), the receipt of an opinion of tax counsel, the effectiveness of a registration statement filed with the U.S. Securities and Exchange Commission, the approval of the New York Stock Exchange to list the PMI shares, as well as the execution of several intercompany agreements and the finalization of other matters.
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Can you explain exactly what happened, and when, at each key point in the process of the Spin-off? |
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Why not sell PMI as a public offering? |
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Spinning off PMI was the best way to achieve our business objectives and to create value for Altria's shareholders. A U.S. tax free distribution of shares in PMI was the most tax efficient way to separate the companies.
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What will the relationship be between Altria and PMI after the Spin-off? |
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After the Spin-off, Altria and PMI will be two independent companies. Altria will not own any shares of PMI stock.
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How will my ownership in Altria change as a result of the Spin-off? |
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The number of shares of Altria stock that you own did not change as a result of the Spin-off, but the dollar value of those shares changed. On the Distribution Date, Altria's shareholders received one share of PMI stock for each share of Altria stock that they owned as of the Record Date. The market value of each Altria share, however, declined to reflect the impact of the Spin-off.
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Are there any transitional agreements between Altria and PMI after the Spin-off is completed? |
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In connection with the Spin-off, Altria and PMI entered into a number of agreements that will govern the Spin-off and the future relationship between the companies.
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What was the Record Date for the Spin-off? |
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The Record Date was March 19, 2008, and ownership was determined as of 5:00 p.m. New York City Time on that date.
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When did the Spin-off occur? |
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Shares of PMI stock were distributed on March 28, 2008. We refer to this date as the Distribution Date.
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What do I have to do to participate in the Spin-off? |
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No action was required by Altria shareholders to receive their PMI stock. Shareholders will have received one share of PMI stock for each share of Altria stock held as of the Record Date and retained through the Distribution Date. Shareholders were also able to participate in the Spin-off if they purchased Altria stock in the "regular way" market and retained their shares through the Distribution Date.
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What banks and law firms advised the Altria Board of Directors and management about the Spin-off? |
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Centerview Partners, Lehman Brothers, Hunton & Williams and Sutherland Asbill & Brennan advised the Board and management. Additionally, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs and JPMorgan Chase were advisors to management.
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What was the Distribution Ratio of Altria shares to PMI shares? |
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The ratio was 1:1. Altria distributed one share of PMI stock for each share of Altria stock outstanding as of the Record Date for the Spin-off.
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What is the estimated initial price per share of PMI's stock? |
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On the first trading day after the Distribution Date, "when issued" trading with respect to PMI's stock ended and "regular way" trading began. The trading price for the stock after the Distribution Date reflects market conditions. |
