Altria Group Inc (MO)

[EZ2]

Altria's CEO Says PMI Spinoff is Still Under Consideration
Friday April 27, 3:57 pm ET
By the BullMarket.com Staff

Louis C. Camilleri, CEO of Altria Group (NYSE: MO - News), acknowledged at yesterday's annual meeting that he is still mulling over the spin-off of Philip Morris International (PMI). He wouldn't provide a timetable, but given the fact that he spoke about it to shareholders is a pretty good indication that this is the direction the company is headed. As we have noted previously, it really comes down to when the move will be made, rather than if.
Spinning off Kraft Foods (NYSE: KFT - News) was just the first step in unlocking value in Altria. PMI is a key component and its contribution would be better recognized by the market, we believe, as a stand-alone company. As we noted in examining Altria's Q1 results, PMI is larger than the U.S. unit, it is growing faster organically, and has more acquisition opportunities. The regulatory picture overseas is also considerably different from what cigarette makers deal with in the U.S., and we expect PMI will be able to move more nimbly on its own.

In reporting results, Altria confirmed that it believes PMI is ready to stand alone. We would be surprised if Altria doesn't begin taking the steps towards a spin-off relatively soon, and we think management will almost certainly act before the end of the current year.

Altria Group and Kraft are Bull Market Report Recommended List stocks.

No member of the Bull Market Report editorial staff contributing to this article has any long or short positions in any company mentioned. Indie Research has a disclosure policy.

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