The Altria Group moved closer to spinning off its Kraft Foods unit yesterday, despite concerns about tobacco litigation, saying it would make a final decision on 31 January 2007.

During a conference call with analysts, Altria’s chief executive, Louis C. Camilleri, said that the board had carefully weighed the risks and rewards of a sell-off and had decided to proceed. The precise timing of the sale is to be announced at the company’s January board meeting.
Altria is the parent company of Philip Morris USA and Philip Morris International.
The announcement is an about-face for Altria, which said in September that a divestiture of its Kraft shares would be put off indefinitely, after a federal judge ruled that smokers of light cigarettes could pursue fraud claims as a class-action suit.
“The significance is the board is moving away from their very traditional stance and being a little more aggressive,” said Christopher Growe, an analyst at A. G. Edwards & Sons. In doing so, the board signaled to investors that they would not have to wait much longer to benefit from the value created by spinning off Kraft, he said.
Growe said a spin-off could happen as soon as this spring, but he added that the board’s announcement was vague enough for it to put off the move at its January meeting.
Altria owns 88.6 per cent of Kraft’s stock, and its planned divestiture is part of a larger restructuring of the company.
Camilleri said the decision would be timed to coincide with the release of a strategic plan by Kraft’s chief executive, Irene B. Rosenfeld, to spur the company’s profits. Rosenfeld, who was named chief executive in June, is expected to release her strategy in February. (pi)