PM Brazil Acquires Universal Contracts Too

Source from:  Tobacco Reporter 06/22/2010

Philip Morris Brazil is taking over from Universal Leaf Tabacos Ltda. tobacco-growing contracts representing about 20 percent of Universal's Brazilian volumes. As part of the transaction, Philip Morris Brazil has agreed to offer employment to certain ULTL employees. The company will also acquire some related assets. Total consideration will depend upon the number and characteristics of the contracts assigned, but it is not expected to be material to Universal's consolidated balance sheet. The transaction is subject to certain closing conditions and government approvals, and is expected to close near the end of the second fiscal quarter. ULTL expects to continue to supply processed leaf to PMI and to provide processing services to PMB. "As we and our customers respond to changing market conditions, we are opening a new chapter in our long-term relationship with PMI," said Airton Hentschke, president of Universal Leaf Tabacos Ltda. "This transaction represents a change in the structure of part of our business here, but we will continue to operate efficiently and provide the quality that all of our customers have come to expect from us." Earlier today, Alliance One announced the assignment of Brazilian farmer contracts to Philip Morris. Enditem