Altria Group said Wednesday it would spin off its international tobacco business, Philip Morris International (PMI), on 28 March 2008.

Shareholders will get one Philip Morris International share for each Altria share, the New York-based company said in a statement.
The company also reported that fourth-quarter net earnings, including discontinued operations, decreased 26.1 per cent to US$ 2.2 billion, reflecting the impact of the Kraft spin-off and other factors. Full-year net earnings, including discontinued operations, decreased 18.6 per cent to US$ 9.8 billion, while operating income increased 2.7 per cent to US$ 13.2 billion.
In line with their peer companies, Phillip Morris USA will payout 75 per cent of earnings and PMI will payout 65 per cent of earnings. Further, Phillip Morris USA and PMI will commence US$ 7.5 billion and US$ 13 billion share repurchase programmes, respectively, in April 2008. The combined buybacks represent approximately 13 per cent of outstanding shares.
After the spin-off, which was approved by the Altria board last August, chief executive officer Louis Camilleri will take charge of the Lausanne, Switzerland-based overseas division PMI and accelerate growth into emerging markets as smoking bans spread in Western Europe. The spin-off could shield PMI from U.S. legal and regulatory issues, such as pending legislation to give the Food and Drug Administration the authority to restrict tobacco advertising, regulate warning labels and remove hazardous ingredients.
Philip Morris USA will focus on snuff to counter falling American cigarette sales. (ci/pi)