8-KMaterial AgreementsOther EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Material Agreement (Oct 3, 2008)

Filed October 3, 2008For Securities:MO

Summary

Altria Group, Inc. (MO) filed a Form 8-K on October 3, 2008, to report an amendment to its Agreement and Plan of Merger with UST Inc. The primary change introduced by Amendment No. 1, dated October 2, 2008, allows Altria to postpone the closing of the UST acquisition to a date no later than January 7, 2009, even if all conditions are met prior to that. This flexibility is reportedly due to advice from Altria's lenders who prefer the transaction to close in 2009. In exchange for this extended closing window at Altria's discretion, the reverse termination fee payable by Altria to UST has been increased from $200 million to $300 million. The conditions under which this fee is payable remain unchanged. This amendment provides Altria with greater control over the timing of the transaction amidst financing considerations, while UST gains increased financial protection in the event of a cancellation under specific circumstances.

Key Highlights

  • 1Altria Group, Inc. (MO) amended its merger agreement with UST Inc. on October 2, 2008.
  • 2The amendment allows Altria to delay the closing of the UST acquisition until January 7, 2009, at its discretion.
  • 3This delay is influenced by Altria's lenders' preference for the transaction to close in 2009.
  • 4The reverse termination fee payable by Altria to UST has been increased from $200 million to $300 million as a result of the amendment.
  • 5The conditions triggering the reverse termination fee remain the same.
  • 6Altria confirms it has fully committed financing for the transaction.
  • 7UST Inc. will file relevant materials, including a proxy statement, with the SEC regarding the merger.

Frequently Asked Questions

The primary change is that Altria now has the option, at its sole discretion, to delay the closing of the acquisition of UST Inc. to a date no later than January 7, 2009, even if all closing conditions are already satisfied.

Altria's lenders have advised that it would be preferable for the transaction to close in 2009. While Altria has committed financing, this is a lender-driven preference for the timing of the deal.

If Altria chooses to delay the closing under these new provisions, the reverse termination fee that Altria would have to pay to UST has been increased from $200 million to $300 million. However, the specific circumstances under which this fee is payable remain unchanged.

Yes, Altria explicitly states that it currently has fully committed financing to complete the transaction.