NEW YORK, Sept. 5 (UPI) -- A major U.S. tobacco company, Altria Group, is closing in on a deal to purchase UST, makers of Skoal and Copenhagen smokeless tobacco products, sources said.
The companies would not comment on the deal, The New York Times reported Friday, but sources said the purchase price for UST would be more than $10 billion.
With the rumors of a purchase afloat, UST Chief Executive Officer Murray Kessler's withdrawal from an analysts' conference Thursday caused a quick jump in UST share values, the Times said. When the company said Kessler had been caught in a scheduling conflict, share prices dropped, the Times reported.
UST also owns Ste. Michelle Wine Estates, one of the 10 largest wine producers in the United States.
Altria's purchase would be "very logical," Christopher Growe, an analyst at Stifel Nicolaus told the Times.
While cigarette sales are in decline, the smokeless tobacco business has grown by 7 percent annually in the past four years, Growe said.
In March, Philip Morris USA split to form Philip Morris International and Altria in part to shield its international business from U.S. legislation and lawsuits, the Times reported.
