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Altria to Sell UST's Wine Business?

Altria Group Inc. will likely sell UST Inc .'s wine business when it closes the deal to acquire the smokeless tobacco company, financial analysts say. The tobacco giant, parent company of Philip Morris USA , would not find UST's wine business, Ste. Michelle Wine Estates , to be a complement to its tobacco business.

While Ste. Michelle provided much smaller UST with some diversity in its business, "in a big organization like Altria, I don't see it making much sense," said Standard & Poor 's alcohol and tobacco analyst Esther Kwon , as quoted by Reuters. "I would expect that they'd put it up for sale once the deal closes."

Altria could fetch as much as $800 million from the unit, offsetting some of the $10.4 million cost of buying UST. Ste. Michelle vineyards span more than 4,200 acres in Washington and California, with such labels as Columbia Crest, Stimson Estate Cellars and Domaine Ste. Michelle.

In a Monday conference call with analysts, Altria CEO Michael Szymanczyk confirmed that Altria would "take a look at the wine business" when it owns UST and "make a determination as to what's the best way to create value for shareholders relative to that." More .