The board of Altria Group, parent of Philip Morris and Kraft Foods, announced yesterday (25 October) that it intends to finalise its decision – including the precise timing – on the distribution of all Kraft shares owned by Altria to Altria’s shareholders. This will be announced at its regularly scheduled shareholders meeting on 31 January 2007.
Louis Camilleri, chairman and CEO of Altria, said: “Today’s announcement brings us a step closer to a fully independent Kraft. It recognises our conviction that, having first publicly discussed the restructuring of the company two years ago, this is the right time to move forward.”
Kraft shares had dropped 1.27% to US$34.89 at time of press, from a previous close of $35.34. It has been suggested that the spin-off will result in a short-term decline in Kraft stock price, as Altria shareholder’s flood the market with the food group’s stock, but will enable Kraft to operate more effectively as a stand alone company.