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NEW YORK (AP) -- Altria, the U.S. leader in cigarettes, wants to be No. 1 in smokeless products too.
The owner of the nation's biggest cigarette seller said Monday that it will buy UST, the maker of Skoal and Copenhagen, in a $10.4 billion deal that is part of the wider consolidation of the global tobacco industry.
Observers say Lorillard, which was spun off from Loews Corp. in June, could be next on the list of potential targets.
"It's going to put pressure on everybody else to consolidate," said Sachin Shah, an analyst with iCap Equities. Shah said tobacco leaf producer Universal Corp. and Vector Group Ltd. could also be potential targets.
Altria owns the Marlboro brand and the nation's biggest cigarette maker, Philip Morris USA. It has been test marketing Marlboro brand smokeless products, but analysts say the results have been disappointing so far. Its acquisition of UST will give it a strong position in smokeless tobacco, a segment of the U.S. market that is growing as cigarettes decline.
American smokers are buying fewer cigarettes as smoking bans and health concerns dampen demand by 3 percent to 4 percent a year. That has forced tobacco companies to look for sales growth from alternatives such as cigars, chewing tobacco and snus, teabag-like pouches that are popular in parts of |
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