Altria Reaches Agreement to Sell Its Ste. Michelle Wine Estates Business
09 Juli 2021 - 2:30PM
Business Wire
- All-cash transaction with a purchase price of approximately
$1.2 billion expected to close in the second half of 2021.
- Altria expects to use net cash proceeds for additional share
repurchases subject to Board approval.
Altria Group, Inc. (Altria) today announced that its subsidiary,
UST LLC, has entered into a definitive agreement to sell its Ste.
Michelle Wine Estates (Ste. Michelle) business to Sycamore Partners
Management, L.P., a private equity firm specializing in consumer,
retail, and distribution investments (Sycamore Partners), in an
all-cash transaction with a purchase price of approximately $1.2
billion and the assumption of certain Ste. Michelle liabilities
(Transaction). Altria’s net cash proceeds will be subject to
customary net working capital and other adjustments at closing.
Altria expects the Transaction to close during the second half
of 2021, subject to Sycamore Partners obtaining the necessary
financing and the satisfaction of customary closing conditions,
including antitrust regulatory clearance.
“We believe the Transaction is an important step in Altria’s
value creation for shareholders and allows our management team
greater focus on the pursuit of our Vision to responsibly
transition adult smokers to a non-combustible future,” said Billy
Gifford, Altria’s Chief Executive Officer. “Ste. Michelle and its
talented employees have built an outstanding portfolio of premium
wine brands, and we wish them future success.”
“The Ste. Michelle leadership team and I look forward to working
with the team at Sycamore Partners and believe we are
well-positioned to drive the next phase of our growth,” said David
Dearie, Ste. Michelle’s President and Chief Executive Officer.
Transaction-related Financial Implications
Altria expects to record any gain or loss on the Transaction and
related disposition items, which it does not anticipate being
material to Altria, in the second half of 2021. Altria intends to
treat these amounts as special items and exclude them from its
adjusted diluted earnings per share. Altria does not expect to
account for the results of Ste. Michelle as discontinued
operations.
Altria expects to use the net proceeds from the Transaction for
additional share repurchases, subject to approval by its Board of
Directors.
Credit Suisse Securities (USA) LLC represented Altria as
financial advisor, and White & Case LLP provided legal counsel
to Altria for the Transaction.
Altria’s Profile
Altria has a leading portfolio of tobacco products for U.S.
tobacco consumers age 21+. Altria’s Vision through 2030 is to
responsibly lead the transition of adult smokers to a
non-combustible future (Vision). Altria is Moving Beyond Smoking™,
leading the way in moving adult smokers away from cigarettes by
taking action to transition millions to potentially less harmful
choices - believing it is a substantial opportunity for adult
tobacco consumers, Altria’s businesses and society.
Altria’s wholly owned subsidiaries include the most profitable
tobacco companies in their categories: Philip Morris USA Inc. (PM
USA), U.S. Smokeless Tobacco Company LLC (USSTC) and John Middleton
Co. (Middleton). Altria’s non-combustible portfolio includes Helix
Innovations LLC (Helix), the maker of on! oral nicotine pouches,
exclusive U.S. commercialization rights to the IQOS Tobacco Heating
System® and Marlboro HeatSticks®, and an equity investment in JUUL
Labs, Inc. (JUUL).
Altria complements its tobacco portfolio with ownership of Ste.
Michelle Wine Estates Ltd. (SMWE) and equity investments in
Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and
Cronos Group Inc. (Cronos), a leading Canadian cannabinoid
company.
The brand portfolios of Altria’s tobacco operating companies
include Marlboro®, Black & Mild®, Copenhagen®, Skoal® and on!®.
SMWE produces and markets premium wines sold under various labels,
including Chateau Ste. Michelle®, 14 Hands® and Stag’s Leap Wine
Cellars™, and it imports and markets Antinori® and Champagne
Nicolas Feuillatte™ products in the United States. Trademarks and
service marks related to Altria referenced in this release are the
property of Altria or its subsidiaries or are used with
permission.
Learn more about Altria at www.altria.com and follow us on
Twitter, Facebook and LinkedIn.
Forward-Looking and Cautionary Statements
This release contains projections of future results and other
forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995.
Important factors that may cause actual results and outcomes to
differ materially from those contained in such forward-looking
statements include the parties’ ability to consummate the
Transaction as expected (including uncertainties related to
Sycamore Partners’ ability to obtain the necessary financing to
consummate the Transaction); the possibility that one or more of
the conditions to the consummation of the Transaction may not be
satisfied; the possibility that regulatory approvals required for
the Transaction may not be obtained in a timely manner, if at all;
the parties’ ability to meet expectations regarding the timing,
completion, and other matters relating to the Transaction; and any
event that could give rise to the termination of the agreement with
Sycamore Partners. Other important factors include the possibility
that the expected benefits of the Transaction may not materialize
in the expected manner or timeframe, if at all, and the other
factors detailed in Altria’s publicly filed documents, including
Altria’s Annual Report on Form 10-K for the year ended December 31,
2020 and its subsequent reports on Forms 10-Q and 8-K.
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