By Dhirendra Tripathi
Investing.com – Altria (NYSE:MO) stock was trading higher by 0.5% in Friday’s premarket following the company’s decision to sell its arm Ste. Michelle Wine Estates to Sycamore Partners for $1.2 billion and focus on non-combustible tobacco and other products.
That the company could use the proceeds to enhance its share repurchases was also adding to the bump in prices.
The private equity firm, specializing in consumer, retail, and distribution investments, will also take on some liabilities of Ste. Michelle as part of the deal besides paying out the cash.
Altria expects the transaction to close during the second half of 2021, subject to Sycamore Partners obtaining the necessary financing and the satisfaction of customary closing conditions, including antitrust regulatory clearance.
Altria expects to record any gain or loss on the transaction and related disposition items in the second half of 2021. None of this is seen as material to the company, Altria said in a note.
The maker of Marlboro cigarettes and JUUL e-vapor brand intends to exclude the amounts from its adjusted diluted earnings per share. Altria said it does not expect to account for the results of Ste. Michelle as discontinued operations.
Related Articles
Altria Gains On $1.2 Billion Sale Of Wine Unit, Plan To Use Money For Buyback
United Airlines to add more flights in anticipation of higher holiday travel
