Altria considers using $2.7 billion in cash for debt repayment

Chicago, Oct. 19 – Altria Group, Inc. announced that it will be receiving the payments of approximately $2.7 billion in exchange for assigning exclusive U.S. commercialization rights to the IQOS tobacco heating system effective April 30, 2024 to a subsidiary of Philip Morris International Inc., according to a press release.

Altria plans to use the cash for several items, which may include investments in pursuit of the company’s vision, debt repayment, share repurchases and general corporate purposes.

Subsidiary Philip Morris will not be exercising its option to renew for an additional five-year term through April 2029. Philip Morris had commercialization rights for the first five-year term, from April 2019 to April 2024.

Altria received a $1 billion payment when it entered into the new agreement. Another $1.7 billion (plus interest) is due by July 2023.

The Richmond, Va.-based company produces cigarette and tobacco products. However, the company is looking to expand beyond smoking and working to expand a portfolio of smoke-free products.

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