Speaking at an investor conference yesterday (16 November), Altria’s CEO cited increased stability due to the settlement of litigation against the tobacco industry as motivation for giving the green light to plans to spin-off Altria’s 85% stake in Kraft Foods.
“The litigation environment has, indeed, continued to evolve favourably since I first spoke here about the possible restructuring of Altria. We firmly believe that it will continue to do so in the years ahead,” Louis Camilleri, chairman and CEO of Altria, told his audience at the Morgan Stanley Global Consumer and Retail Conference in New York yesterday.
“As you all know, we announced that the Board will finalize its decision, including the precise timing, on the spin-off of Kraft on January 31, 2007. This announcement is testament to our conviction and comfort with the litigation environment today, and going forward,” he elaborated.
This timetable, Camilleri continued, provides the board with the necessary time to complete the formal decision making process, and coincides with the planned public announcement of Irene Rosenfeld’s profitable growth strategy for Kraft, and thus address the potential overhang created by the tax-free distribution of close to 1.5bn Kraft shares to Altria shareholders.
