Altria to buy cigar maker John Middleton for $2.9 billion

Tobacco giant Altria Group has agreed to acquire cigar maker John Middleton from the privately-held Bradford Holdings for $2.9 billion. The net cost of the deal will be $2.2 billion, after deducting $700 million in present value tax benefits.

Previously named Philip Morris Companies Inc, the Altria Group is based in New York. It is the parent company of Philip Morris International, Philip Morris USA and Philip Morris Capital Corporation, making it one of the world''s largest tobacco corporations.

Altria expects the deal to be completed by the end of 2007. It anticipates the transaction, which will be financed with existing cash, will modestly add to earnings in fiscal 2008.

Analysts estimate that operating revenues for John Middleton would be around $360 million in 2007, and that the company will generate an operating income of about $182 million.