8-KAcquisitions & DispositionsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Acquisition Completed (Apr 3, 2008)

Filed April 3, 2008For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K on April 3, 2008, to report the completion of a significant corporate action: the spin-off of its international tobacco business, Philip Morris International Inc. (PMI). This transaction, effective March 28, 2008, involved distributing 100% of Altria's shares in PMI to its stockholders on a pro-rata basis. For every share of Altria common stock held on the record date of March 19, 2008, stockholders received one share of PMI. The value of this distribution was substantial, with PMI shares trading at approximately $51.06 on the 'when issued' market on the distribution date, valuing the entire distribution at roughly $107.7 billion. The primary goal of this spin-off was to separate the U.S. and international tobacco operations, allowing each entity to pursue its distinct strategic objectives and capital allocation priorities more effectively. For Altria shareholders, this event represented a major restructuring, creating two independent, publicly traded companies. Altria would now focus solely on its domestic operations, including its significant stake in Anheuser-Busch InBev, while PMI would concentrate on global markets, free from the regulatory and market dynamics specific to the United States. The distribution was structured to be tax-free to U.S. federal income tax purposes for Altria stockholders.

Key Highlights

  • 1Completion of spin-off: Altria Group, Inc. successfully completed the distribution of 100% of its ownership in Philip Morris International Inc. (PMI) to its stockholders.
  • 2Distribution details: The spin-off occurred on March 28, 2008, with stockholders of record as of March 19, 2008, receiving one share of PMI for each share of Altria common stock held.
  • 3Significant market value: The distributed PMI shares had an approximate market value of $107.7 billion based on the 'when issued' closing price of $51.06 per share on March 28, 2008.
  • 4Tax-free transaction: The distribution was structured to be tax-free for U.S. federal income tax purposes for Altria stockholders.
  • 5Pro forma financial information included: The filing includes unaudited pro forma condensed consolidated financial statements for years 2005-2007, reflecting the impact of the PMI spin-off.
  • 6Strategic separation: The spin-off aimed to create two distinct, focused companies – Altria for U.S. operations and PMI for international markets – enabling tailored strategic and capital allocation plans.

Frequently Asked Questions

The main event reported is the completion of the spin-off of Philip Morris International Inc. (PMI) from Altria Group, Inc. This means Altria distributed all of its shares in PMI to its own shareholders.

If you owned Altria shares on March 19, 2008 (the record date), you received one share of Philip Morris International (PMI) for every share of Altria stock you held. This resulted in you owning shares in two separate companies: Altria Group, Inc. and Philip Morris International, Inc.

According to the filing, the distribution was structured to be tax-free for U.S. federal income tax purposes for Altria stockholders.

The spin-off was a strategic decision to separate Altria's U.S. and international tobacco businesses. This allows each company to focus on its respective markets, pursue independent growth strategies, and manage capital allocation differently.