Tobacco.org

• Altria Pursuit of UST Makes Lorillard Next Possible Target  

Altria Group Inc.'s pursuit of snuff maker UST Inc. may mean that Lorillard Inc., the manufacturer of Newport menthol cigarettes, is the next target as the U.S. tobacco industry consolidates.

A UST acquisition might compel Reynolds American Inc., the second-largest U.S. tobacco company, to bid for the Greensboro, North Carolina-based cigarette manufacturer, said Nik Modi, an analyst at UBS Securities LLC, and investor Matthew Kaufler. Lorillard, with a market value of $12.9 billion, climbed 6.4 percent yesterday in New York trading.

Altria, the maker of the top-selling Marlboros, may offer at least $10 billion, or $68 a share, for UST, the producer of top-selling Skoal and Copenhagen snuff, people with knowledge of the talks said. Shrinking sales in the $70 billion U.S. cigarette industry may force companies to combine, while waning legal risk may attract international suitors.

Investors ``are sniffing out the next deal in tobacco,' . . .

Waning legal risk after U.S. tobacco makers prevailed in three multibillion-dollar lawsuits may draw overseas producers to the U.S.

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