Why did Altria spin off PMI?
Altria’s Board of Directors and management believed that the Spin-off would enable each of Altria’s international and domestic tobacco businesses to focus exclusively on realizing its own opportunities and addressing its own challenges, thereby building long-term shareholder value. Some of the benefits include an improved focus on the different market dynamics and competitive frameworks, a more optimal and efficient capital allocation, a greater financial flexibility, a greater transparency leading to the elimination of the sum-of-the-parts discount under which Altria’s stock has typically traded, a reduction in corporate overhead, the creation of a potential acquisition currency in the form of a more focused equity, and a tighter alignment of compensation and rewards with the performance of each entity.
