Altria Group, UST amend merger agreement, extend closing to January

By Lisa Kerner

Charlotte, N.C., Oct. 3 - Altria Group, Inc. and UST Inc. amended their Sept. 7 merger agreement, it was announced on Friday.

Under the amended agreement, the closing date is extended at Altria's option to a date that is "no later than early January" provided all closing conditions are met in 2008.

According to Altria, while it has fully committed financing to complete the transaction, its lenders prefer that the transaction close in 2009.

Altria will use existing credit and cash, plus new committed bridge financing totaling $7.0 billion from Goldman Sachs and JPMorgan, to fund the acquisition, it was previously reported. In addition, Altria said it plans to access the public debt market to refinance a portion of its credit facilities.

Altria and UST also agreed to increase the reverse termination fee payable by Altria to $300 million from $200 million under certain circumstances.

In September, Altria agreed to acquire all outstanding shares of UST for $69.50 each in a transaction valued at approximately $11.7 billion, including the assumption of approximately $1.3 billion of debt.

UST is a holding company for U.S. Smokeless Tobacco Co., a producer and marketer of moist smokeless tobacco products including Copenhagen, Skoal, Red Seal and Husky. The company is located in Stamford, Conn.

Altria, located in Richmond, Va., manufactures and sells cigarettes and other tobacco products. It is the parent company of Philip Morris USA.

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