Altria Group, Inc. Agrees to Acquire John Middleton, Inc. for $2.9 Billion

    


Altria Group Inc



        Extends Its U.S. Tobacco Business Into the Growing Cigar Category

Altria Group, Inc. (NYSE: MO) announced today that it entered into an agreement
to acquire 100% of John Middleton, Inc., a leading manufacturer of machine-made
large cigars, from privately held Bradford Holdings for $2.9 billion in cash.
The net cost of the acquisition, after deducting approximately $700 million in
present value tax benefits arising from the terms of the transaction, is $2.2
billion.

"This acquisition, which takes place on the eve of Altria Group, Inc.'s intended
restructuring, is being undertaken to enhance our long-term growth momentum in
the U.S. market and create shareholder value," said Michael E. Szymanczyk,
Chairman and CEO of Philip Morris USA (PM USA). "The acquisition is both
strategically compelling and financially attractive. It fits squarely with our
announced strategy to grow our U.S. tobacco business beyond cigarettes and
complements our recent initiatives in the smokeless category."

John Middleton, Inc.'s operating revenues are projected to reach $360 million in
2007, generating operating income of $182 million. Over the 2003 to 2007 period,
operating revenues and operating income are estimated to have grown at compound
annual rates of approximately 10% and 13%, respectively, driven by the strength
of the Black & Mild cigar brand franchise. In 2007, total company cigar volume
is expected to reach a level of 1.2 billion units.

Subject to necessary regulatory approvals, Altria anticipates that the
transaction will be completed by year-end 2007. The acquisition, which will be
financed with existing cash, is expected to be modestly accretive to Altria's
2008 earnings and generate an attractive double-digit economic return.

"While there may be some cost savings, captured predominantly through
procurement synergies and the elimination of duplicative expenses, the real
appeal of this acquisition is to capitalize on PM USA's sales, distribution and
marketing infrastructure and expertise," Mr. Szymanczyk said. "Further, PM USA
will contribute its strong capabilities, resources and focus on corporate
responsibility, including youth smoking prevention."

"We look forward to welcoming John Middleton, Inc.'s talented employees to the
Altria family and to building upon the company's strong growth track record,"
Szymanczyk added. "The plan is to accelerate the Black & Mild brand's market
share growth momentum in the years ahead by leveraging the expertise and
capabilities of both John Middleton, Inc. and PM USA."

Growing Cigar Market

The U.S. cigar market is the world's largest with an estimated total consumption
of 10.5 billion units or more than 40% of the world market. It is comprised of
three segments: large machine-made, small machine-made and hand-rolled premium
cigars.

John Middleton, Inc. participates in the large machine-made cigar segment, which
has projected volume of 5.3 billion units in 2007. The segment is estimated to
have grown volumes at a compound annual rate of approximately 4% over the 2003
to 2007 period and is highly profitable.

Black & Mild

Black & Mild, a high-quality, large machine-made cigar manufactured with a
unique and proprietary blend of pipe tobacco, enjoys strong brand equity, high
brand awareness and solid volume and share growth momentum. The Black & Mild
brand is the second-largest selling machine-made large cigar in the U.S., with a
retail market share of approximately 23 percent, and the Black & Mild five-cigar
pack is the best-selling large machine-made cigar package in the U.S., according
to data through June 2007 from Information Resources, Inc.* It is particularly
strong in the South and Southeast regions of the U.S., which together account
for approximately 55% of segment volume.

*IRI Total U.S. FDMC Syndicated Reviews Database

Company Profile

John Middleton, Inc. was founded in 1856. It operates two manufacturing
facilities in King of Prussia and Limerick, Pennsylvania. It has approximately
550 highly skilled and committed employees with close to 90% dedicated to
manufacturing.

Management

Upon closing, John Middleton, Inc. will continue to operate from its current
facilities in Pennsylvania. Orrin Ridington, Jr., the current President of John
Middleton, Inc., will continue to lead the company's operations from Limerick,
Pennsylvania and will work closely with the PM USA management team to best
capitalize on each company's strengths.

Clinton Price, Sr., the current CEO, will retire as previously planned, and has
agreed to stay on in an advisory capacity during a transition period.

Altria Group, Inc. Profile

As of September 30, 2007, Altria Group, Inc. owned 100% of Philip Morris
International Inc., Philip Morris USA Inc. and Philip Morris Capital
Corporation, and approximately 28.6% of SABMiller plc. The brand portfolio of
Altria Group, Inc.'s tobacco operating companies includes such well-known names
as Marlboro, L&M, Parliament and Virginia Slims. Altria Group, Inc. recorded
2006 net revenues from continuing operations of $67.1 billion.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and other
forward-looking statements that involve a number of risks and uncertainties and
are made pursuant to the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. The following important factors could cause
actual results and outcomes to differ materially from those contained in such
forward-looking statements. Altria Group, Inc.'s tobacco subsidiaries (Philip
Morris USA and Philip Morris International) are subject to intense price
competition; changes in consumer preferences and demand for their products;
fluctuations in levels of customer inventories; the effects of foreign economies
and local economic and market conditions; unfavorable currency movements and
changes to income tax laws. Their results are dependent upon their continued
ability to promote brand equity successfully; to anticipate and respond to new
consumer trends; to develop new products and markets and to broaden brand
portfolios in order to compete effectively with lower-priced products; and to
improve productivity.

Altria Group, Inc.'s tobacco subsidiaries continue to be subject to litigation,
including risks associated with adverse jury and judicial determinations, and
courts reaching conclusions at variance with the company's understanding of
applicable law and bonding requirements in the limited number of jurisdictions
that do not limit the dollar amount of appeal bonds; legislation, including
actual and potential excise tax increases; discriminatory excise tax structures;
increasing marketing and regulatory restrictions; the effects of price increases
related to excise tax increases and concluded tobacco litigation settlements on
consumption rates and consumer preferences within price segments; health
concerns relating to the use of tobacco products and exposure to environmental
tobacco smoke; governmental regulation; privately imposed smoking restrictions;
and governmental and grand jury investigations.

Altria Group, Inc. and its subsidiaries are subject to other risks detailed from
time to time in its publicly filed documents, including its Quarterly Report on
Form 10-Q for the period ended June 30, 2007. Altria Group, Inc. cautions that
the foregoing list of important factors is not complete and does not undertake
to update any forward-looking statements that it may make.

Additional Information

More information about PM USA and John Middleton, Inc. is available at
www.altria.com.

CONTACT:    Altria Group, Inc. Investor Line
            (917) 663-2200
            or
            Philip Morris USA Inc. Media Center
            (804) 484-8897
Altria Group (LSE:ALA)
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