RICHMOND, Va. (AP) -- Altria Group Inc. said Tuesday it closed its acquisition of UST Inc., the biggest player in the U.S. smokeless tobacco market.
The buyout was valued at $10.4 billion, plus the assumption of $1.3 billion in debt. The deal gives UST shareholders $69.50 per share. Stamford, Conn.-based UST will become a subsidiary of Altria.
Richmond-based Altria owns the No. 1 U.S. cigarette maker Philip Morris USA, which sells the Marlboro brand in the U.S. Altria also owns cigar maker John Middleton Co., Ste. Michelle Wine Estates Ltd. and a 29 percent stake in brewer SABMiller PLC.
Altria's purchase of UST, maker of the Copenhagen and Skoal smokeless tobacco brands, gives it a leading position in the expanding market for smokeless tobacco. Tobacco companies are pursuing smokeless sales aggressively as sales of cigarettes decline by roughly 3 percent to 4 percent a year.
Altria Group Chief Executive Michael Szymanczyk has said the integration of UST would position the company well as domestic cigarette demand falls.
Altria brings its marketing muscle to a market already occupied by its smaller rival, Reynolds American Inc. Reynolds owns Conwood Co., which sells the Grizzly and Kodiak smokeless tobacco brands.
Altria announced in September that it would buy UST after getting mixed results from its market tests of its own Marlboro brand smokeless products in the Atlanta, Indianapolis and Dallas-Fort Worth areas.
Shares of Altria rose 3 cents to $15.41 in morning trading.