Altria CEO Sees 'No Great Deal' in Selling Wine Unit

Source from:  Bloomberg 02/22/2010

Altria Group Inc. will hold on to its wine unit, which is growing faster than its tobacco business, because it wouldn't currently fetch enough in a sale, Chief Executive Officer Michael Szymanczyk said. "There's no great deal to be had in selling," Szymanczyk, 61, said today in an interview at the Consumer Analyst Group of New York conference in Boca Raton, Florida. "Our position is that, for now, we are going to keep that business." Altria, the largest U.S. tobacco company, said a year ago it was evaluating the possible sale of the unit that sells wines including Chateau Ste. Michelle, as well as of its stake in SABMiller Plc, the world's second-largest beer maker. The wine business generated sales of $403 million last year, or 1.7 percent of Altria's revenue that comes mostly from Marlboro and other cigarettes. Altria, based in Richmond, Virginia, said it plans to retain its investment in SABMiller for "the foreseeable future," Chief Financial Officer David Beran told analysts at the conference. Altria gained 22 cents, or 1.1 percent, to $20 at 4:02 p.m. in New York Stock Exchange composite trading. SABMiller shares advanced 31 pence to 1,753 pence in London trading. Selling its stake in the London-based maker of Pilsner Urquell and Miller Genuine Draft would weaken Altria's balance sheet and hurt earnings per share, Beran said. Altria owned 430 million SABMiller shares, or 27 percent, as of June 1, according to Bloomberg data. The company got the wine division when it acquired snuff maker UST Inc. in January 2009. It served wine sold by the unit to analysts at a dinner yesterday at the conference. "The market's not very good for a wine business," Szymanczyk said, referring to a possible sale. "Were the market different, we might have looked at it differently in the early window of the transaction." Enditem