Altria / UST Merger Agreement Details and CEO Letter to Employees

Here are the details of the Altria (MO) UST (UST) deal.

Here is the letter from the Chairman and CEO.

Subject: Altria Group, Inc. Agrees to Acquire UST Inc.

I write with exciting news. This morning, Altria Group, Inc. (Altria) and UST Inc. (UST) announced that they have entered into a definitive agreement for Altria to acquire all outstanding shares of UST, the world’s leading moist smokeless tobacco (MST) manufacturer. The transaction is valued at approximately $11.7 billion, which includes the assumption of approximately $1.3 billion of debt. Click here to view today’s press release.

We are sending you these materials in advance of broad employee distribution because you have an important leadership role in explaining this transaction to our organizations.

Thus, please emphasize the following points with your respective staffs:

• This acquisition advances Altria’s mission to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products.

• The combination of Altria and UST will, upon closing, create the premier tobacco company in the United States with leading brands in cigarettes, smokeless tobacco and machine-made large cigars.

• The MST segment is growing; our acquisition of the number one and number two brands in this segment will immediately provide the company with national scale, once the transaction is closed.

• Marlboro Snus and Marlboro MST will remain in test market. These test markets have provided us with numerous learnings about the smokeless tobacco category.

• As stated in the press release, the transaction is subject to regulatory review and approval, and UST shareholder approval, prior to closing. In the meantime, there should be NO communication with UST except as coordinated and managed by the transaction team led by Howard Willard.

• All communications regarding the transaction must be reviewed and approved in advance by the Corporate Communications Department.

• Any external inquiries about the transaction should be immediately forwarded to Corporate Communications or Investor Relations.

I think the fact that Marlboro Smokeless and Snus are remaining in “test” is an admission that Altria had hit a wall with the products and acquiring UST was the best option remaining to not only enter the market, but to dominate it.

JP MORGAN (JPM) COMMITMENT LETTER


FULL SEC MERGER FILING

Disclosure (“none” means no position):Long MO, none
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