Up to Snuff
I saw in today's NY Times that the Altria Group - the fancy, "let's not have a name that makes people think about lung cancer" name for Philip Morris - has acquired UST (the far less disguised name for US Tobacco.
UST is the company we have to thank for "smokeless", dipping tobacco - Copenhagen and Skoal.
The combination raises Altria from “virtually no position” in the $3.7 billion snuff market, the fastest-growing segment of the tobacco industry, the chief executive, Michael E. Szymanczyk, told analysts on Monday. It may ease investor concerns that Altria is too focused on cigarette sales in the United States, which the company expects to shrink by 3.5 percent this year, and counter falling demand for Marlboros.
Who knew that there's a $3.7 billion snuff market? No wonder Altria wanted in. And I'm sure that diversifying with a dip into dip will placate those investors so concerned about Altria's being too focused on gross, smelly, smokey old cigarettes.
UST's share price for the deal is $69.50 - up quite a nip from a year ago, when it was languishing around $50. That said, the company was hurting, as snuff users were substituting brands that were cheaper than Copenhagen and Skoal.
Anyway, the deal on the table I would guess is congruent with the lofty mission they had laid out for themselves.
UST's primary mission is to create superior stakeholder value by delivering long-term, sustainable and consistent earnings growth.
(Am I the last person left on earth who thinks that a mission statement that talks only about creating superior stakeholder value is about as appealing as the contents of a spittoon outside the doors of the floor of the US House of Representatives in, say, 1860?)
I'll say one thing for the acquiring company, Altria seems willing to own up to what they do in their mission statement:
Our Mission is to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products.
Although you do have to wonder what their definition of "responsibly" is, don't you.
Meanwhile, my wikipedia read-up on snuff tells me all about the difference between gentlemanly, Duke of Leicestershire, pinch of dry snuff in the nostril European snuff - which comes in all sorts of flavors, including cheddar, cola, bourbon, raspberry, and corn. (Corn?) - and the more rough and tumble, cowboy on the range - ballplayer in the dugout moist, rub it on your gums like Anbesol American snuff.
But corn snuff? Corn snuff?????
And, while I think about it, cheddar snuff?