Altria Sets Kraft Spinoff for March 30

Altria Sets Kraft Spinoff for March 30

Altria Sets Kraft Spinoff for March 30

 Altria Group Inc. on Wednesday said it plans to spin off its 89 percent stake in Kraft Foods Inc. on March 30, completing the long-awaited separation of the maker of Oreo cookies from the Philip Morris tobacco companies.

Under terms of the spin off plan, Altria shareholders will receive 0.7 share of Kraft for each Altria share they own.

The timing of the spin off is earlier than some analysts had anticipated and means new Kraft Chief Executive Irene Rosenfeld will have less time to put her strategy for the foodmaker in place before it becomes an independent company. Kraft shares fell almost 1.5 percent on the news, while Altria shares were up less than 1 percent.

The spin off has been eagerly awaited since Altria management first spoke of the idea more than two years ago. The company held off on the separation until it received favorable rulings in several large tobacco liability lawsuits. Altria's predecessor, Philip Morris Cos. Inc., acquired Kraft in 1988.

``I believe that an independent Kraft will enjoy enhanced flexibility to grow its business and be in a substantially stronger position to create enduring shareholder value,'' said Louis Camilleri, Altria Chairman and Chief Executive Officer. Camilleri is currently also Kraft's chairman but will be leaving that post in connection with the spin off.

Altria said a ``when issued'' public market will be established on the New York Stock Exchange before the record date of the spin off for trading of Altria shares without the Kraft holding.

Anticipation of deal had helped lift shares of Altria, a component of the Dow Jones industrial average (.DJI), about 21 percent in the past year, with the stock reaching an all-time high of $90.50 on January 11.

Altria shares were up 76 cents to $88.30 on Wednesday on the New York Stock Exchange and Kraft was down 50 cents at $34.33.