Altria Inc | Philip Morris (US)

Altria continues to operate under the comparatively anonymous name it adopted in 2003, but to all intents and purposes it is Philip Morris Tobacco, the US home of Marlboro cigarettes and other brands. Although it retains a small collection of other interests in lease finance and wine, all its bigger subsidiaries were spun off in the 2000s. Under its former name of Philip Morris Companies, it was not only the world's largest tobacco producer, but also the umbrella for food and beverage giant Kraft and America's second-largest brewer, Miller. The gradual reduction in tobacco-related litigation following a historic legal settlement at the end of the 1990s encouraged the group to begin separating out its various component businesses. The brewery business was spun off in 2002 into what is now SABMiller (and will soon be an enlarged AB InBev) and Kraft was established as a separate independent group in Spring 2007, though it too has undergone several subsequent changes. A full separation of the US and international tobacco businesses took place in March 2008 when the latter business, now Philip Morris International, was spun off as an independent company. 

Who are the competitors of Philip Morris USA? See Tobacco Sector index for other companies

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Adbrands Weekly Update 17th Jul 2014: US tobacco companies Reynolds American and Lorillard agreed terms for a merger to create a stronger rival to local leader Altria, whose Marlboro brand still dominates the sector with more than 40% market share. Other brands contribute to Altria's total share in 2013 of just under 46%. Currently, #2 player Reynolds is some way behind at 24.7%, from products such as Pall Mall and Camel, but its share has been in slow decline for several years. Third-ranked Lorillard, on the other hand, has been growing because of the popularity of its menthol brand Newport, now the second best-selling cigarette after Marlboro. In 2013, its market share rose to 13.6%. Under the deal unveiled this week, Reynolds would acquire Lorillard for around $27.4bn in cash and stock. In order to ease regulatory concerns over the reduction of competition in what is already a highly controversial sector, Reynolds and Lorillard are also offering to divest several brands. Much smaller Imperial Tobacco, maker of discount brand USA Gold, has been lined up to acquire Reynolds' Winston, Salem and Kool brands, as well as Lorillard's Maverick and top-selling Blu e-cigarette brand, for around $7.1bn. That would reduce Reynolds/Lorillard's combined share to a little over 35% and lift Imperial to over 9%. At the same time, British American Tobacco, the largest shareholder in Reynolds, is investing $4.7bn in order to maintain its 42% holding in the merged group. The extraordinarily complex deal will require the approval of three sets of shareholders and is also likely to entail a long regulatory investigation.

Subscribers may access the following website links: Phillip Morris

Marlboro brand profile SABMiller
Philip Morris USA John Middleton
Benson & Hedges US Smokeless Tobacco Company
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