8-KAcquisitions & DispositionsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Acquisition Completed (Apr 5, 2007)

Filed April 5, 2007For Securities:MO

Summary

This Form 8-K filing from Altria Group, Inc. reports on the completion of a significant corporate action: the spin-off of its subsidiary, Kraft Foods Inc. The distribution, which occurred on March 30, 2007, involved approximately 88.9% of Kraft's outstanding shares being transferred to Altria stockholders. This strategic move effectively separated Altria's tobacco business from its food and beverage operations under Kraft. For investors, this event signifies a major shift in Altria's business profile and its future strategic direction. The spin-off was designed to be tax-free for most U.S. federal income tax purposes. The filing also includes pro forma financial statements to help investors understand the financial implications of this separation, presenting how Altria's financial statements would have looked had the Kraft spin-off occurred earlier. Investors should review these pro forma statements to gauge the post-spin-off financial health and operational focus of Altria.

Key Highlights

  • 1Completion of Kraft Foods Inc. spin-off to Altria stockholders on March 30, 2007.
  • 2Altria distributed approximately 88.9% of its Kraft shares.
  • 3Each Altria stockholder received 0.692024 shares of Kraft for each Altria common stock share held.
  • 4The aggregate market value of distributed Kraft shares was approximately $46.1 billion.
  • 5The distribution was structured to be tax-free to Altria stockholders for U.S. federal income tax purposes (excluding cash for fractional shares).
  • 6Kraft Foods Inc. is described as a manufacturer and marketer of packaged food and beverage products.
  • 7Unaudited pro forma financial statements reflecting the spin-off are included as an exhibit.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the completion of the spin-off of Kraft Foods Inc. from Altria Group, Inc. It details the distribution of Kraft shares to Altria stockholders and provides related financial information.

The spin-off significantly alters Altria's business focus by separating its tobacco operations from its food and beverage segment (Kraft). Post-spin-off, Altria will primarily be a tobacco company, allowing it to concentrate resources and strategy on that core business.

The spin-off was structured to be tax-free for U.S. federal income tax purposes for Altria stockholders. The only exception is for any cash received in lieu of fractional shares, which may be taxable.

Unaudited pro forma condensed consolidated financial statements, including statements of earnings for 2004-2006 and a balance sheet as of December 31, 2006, are included as Exhibit 99.1 to this filing. These statements are presented to show the financial impact as if the separation had occurred earlier.