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Maker of Marlboros May Buy Skoal for $10B

By Clay Dillow,  Newser Staff

Posted Sep 5, 2008 8:25 AM CDT

(Newser) – The nation’s largest cigarette maker, Altria Group, is in talks to acquire UST, the producer of Skoal and Copenhagen smokeless tobaccos for a rumored $10 billion, the New York Times reports. Altria, a spinoff of Philip Morris, makes Marlboro cigarettes. Negotiators were poised to strike a deal over the weekend, the Times notes.

Analysts have long supported such a merger. The smokeless tobacco market is growing, and the companies could cut costs because they market and distribute to the same outlets. As cigarette sales have declined steadily over past decades, Altria has sought other revenue streams. Last year, it bought John Middleton, a maker of cigars and pipe tobacco.

In this photo provided by Altria Group Inc., Michael E. Szymanczyk, chairman and chief executive officer of Altria Group Inc., speaks at the company's annual shareholder meeting, May 28, 2008.
In this photo provided by Altria Group Inc., Michael E. Szymanczyk, chairman and chief executive officer of Altria Group Inc., speaks at the company's annual shareholder meeting, May 28, 2008.   (AP Photo/Altria Group)
The maker of Marlboros may buy the maker of Skoal.
The maker of Marlboros may buy the maker of Skoal.   (File photo)
Farm workers make their way across a field shrouded in fog as they hoe weeds from a burley tobacco crop near Warsaw, Ky., early Thursday, July 10, 2008.
Farm workers make their way across a field shrouded in fog as they hoe weeds from a burley tobacco crop near Warsaw, Ky., early Thursday, July 10, 2008.   (AP Photo/Ed Reinke)
Altria group, makers of Marlboro cigarettes, is in rumored talks to purchase UST, owner of Copenhagen and Skoal brands smokeless tobacco.
Altria group, makers of Marlboro cigarettes, is in rumored talks to purchase UST, owner of Copenhagen and Skoal brands smokeless tobacco.   (AP Photo/Mel Evans, file)
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