Altria to spin-off Kraft Foods Inc.


Jan 31, 2007

Altraia Group, Inc.'s board of directors authorized a spin-off of all shares of Kraft Foods Inc. owned by Altria to Altria's shareholders.

Approximately 89% of Kraft's outstanding shares owned by Altria will be made on March 30, 2007, to Altria shareholders of record as of 5 p.m. EST on March 16, 2007.

Both Kraft and Altria say the merger will be beneficial in that it will:

  • Enhance Kraft's ability to make acquisitions, including by using Kraft stock as acquisition currency, to compete more effectively in the food industry;
  • Allow management of Altria and Kraft to focus more effectively on their respective businesses and improve Kraft's ability to recruit and retain management and independent directors;
  • Provide greater aggregate debt capacity to both Altria and Kraft; and
  • Permit Altria and Kraft to target their respective shareholder bases more effectively and improve capital allocation within each company.

Altria will distribute approximately 0.7 of a share of Kraft for every share of Altria common stock outstanding as of the record date, based on the number of Altria shares outstanding on that date. Altria shareholders will receive cash in lieu of fractional shares for amounts of less than one Kraft share. The exact distribution ratio will be determined on the record date.

"I am extremely pleased to announce the spin-off of Kraft today, a major step in our commitment, announced more than two years ago, to deliver superior shareholder value," said Louis C. Camilleri, Altria chairman and CEO. "I believe that an independent Kraft will enjoy enhanced flexibility to grow its business and be in a substantially stronger position to create enduring shareholder value."