Filed under: Industry Tactics, Spit and Chew Tobacco | Tags: Altria, buy-out, chew, Philip Morris, Smokeless Tobacco, Spit Tobacco, US Smokeless
Altria buys maker of smokeless tobacco for $10 billion
By Michael J. De La Merced The Associated Press, The New York Times
Richmond, Virginia: Altria confirmed Monday that it would buy UST for nearly $10 billion in a deal that will give the maker of Marlboro cigarettes products in the smokeless tobacco market.
Altria, based in Richmond, Virginia, said it would buy UST for $69.50 per share in cash. UST makes the Skoal and Copenhagen smokeless tobacco brands.
The purchase price is a 3 percent premium to UST’s closing price Friday of $67.55.
Altria said it would also assume about $1.3 billion in UST debt in the deal, lifting the total value of the transaction to $11.7 billion.
Altria will also get Ste. Michelle Wine Estates as part of the deal.Altria still expects to earn between $1.63 and $1.67 per share from continuing operations in 2008.
It is Altria’s first major deal since it spun off its international tobacco business in March, and it may prompt more consolidation in the tobacco industry.
The move by Altria, formerly known as Philip Morris, will come as no surprise to analysts, who said on Friday that the combination made sense.
Cigarette sales have been declining for decades. Altria said in July that it expected shipments to fall 3.5 percent this year, more than it had initially projected. Rising cigarette prices and higher U.S. government excise taxes are expected to contribute to that drop, analysts say.
But smokeless tobacco has grown about 7 percent annually over the last four years.
Acquiring UST, formerly the U.S. Tobacco Company, would significantly strengthen Altria’s presence in the smokeless tobacco business. To date, Altria’s only major competitor to Copenhagen and Skoal has been Marlboro-branded moist smokeless tobacco and snuff, which have not been popular in the United States.
Altria’s marketing and distribution muscle may also lift UST’s fortunes, as the smaller company faces increased competition on the lower end of the smokeless tobacco market. With consumer spending falling, many analysts and industry executives expect that buyers will spend less on premium products and switch to lower-end smokeless tobacco.
In a way, Altria is playing catch-up with its biggest competitor, Reynolds American. In 2006, Reynolds bought Conwood, the second-largest maker of smokeless tobacco after UST, for $3.5 billion.
Analysts speculated that Altria’s deal might prompt Reynolds American to respond by making a bid for Lorillard, the other major American tobacco company.
UST also owns Ste. Michelle Wine Estates, which is one of the 10 largest producers of premium wines in the United States.
Filed under: Laws, Research, Secondhand Smoke, SmokeFree Colorado, Youth and Prevention | Tags: Secondhand Smoke, campus, smokefree
Lung Association study finds fewer college students smoking
CU officials considering ’smoking zones’ on campus
By Heath Urie Camera Staff Writer
Monday, September 8, 2008
By the numbers
www.lungusa.org.
Fewer college students than ever before are regular tobacco smokers, despite being targeted by aggressive tobacco marketing campaigns, according to a new study by the American Lung Association.
The report, which provides an overview of tobacco use and policies on college and university campuses nationwide, found that about one in five college students are smokers.
The last time the rate of college-age smokers was that low was 1989, according to the study, although the number later peaked at 30.6 percent in the 1990s.
In a news release today, American Lung Association CEO Bernadette Toomey said colleges and universities still need to do more to protect students.
“Every college student in America has a target on their back as far as the tobacco industry is concerned,” Toomey said. “Colleges and universities have a responsibility to provide safe spaces in which their students can learn and live. This should include an environment free from secondhand smoke and advertising that encourages young adults to use deadly tobacco products.”
At the University of Colorado in Boulder, Regent Michael Carrigan has been leading that same chargefor more than a year.
Carrigan has proposed banning smoking inside and out at the Boulder campus, and said this week that he believes it’s “only a matter of time” before all of CU goes tobacco free.
“It’s a national trend, and CU has the opportunity to be at the forefront of this and not the end of it,” he said.
According to the results of an unscientific survey conducted in November across CU’s campuses and administrative offices, a narrow majority — 51.5 percent — of respondents said they think the school should ban all tobacco use on the campuses.
Smoking indoors is already prohibited.
Figuring out how to do that, though, when so many students who live on campus would have to walk long distances to avoid breaking the rules, is still a big question.
“I can’t tell you exactly what that answer will be,” Carrigan said. “I am fully confident that 10-15 years from now, all of our campuses will be smoke free. The question is, do we want to be a leader on this issue or a follower?”
CU spokesman Bronson Hilliard said university officials are examining how to possibly create “smoking zones” outside of buildings on campus that don’t interfere with passing students.
“The challenge of implementing Regent Carrigan’s proposal is we don’t have uniform space between buildings,” Hilliard said. “We haven’t yet determined a way to make sure every building can have one of these zones.”
Hilliard said a draft proposal for creating such zones is being considered by Frank Bruno, vice chancellor for administration at CU.
“With the health conscience campus we have, it’s an important thing to look at,” Hilliard said.
