Bizworld: As Cigarette Sales Decline in U.S., Altria Thinks Bigger – As in Cigars
NEW YORK | Cigars are in.
Altria Group Inc. on Thursday agreed to spend $2.9 billion for John Middleton, maker of large, machine-made cigars.
With cigarette consumption steadily declining in the United States, Altria has looked for products, such as cigars and smokeless tobacco, to replace those losses. Altria Group owns Philip Morris USA, maker of brands such as Marlboro, Virginia Slims, Parliament and Basic. In the third quarter, domestic cigarette volume declined between 3 and 4 percent.
In the deal to buy John Middleton Inc., maker of Black & Mild cigars, Altria said the purchase price includes about $700 million in tax benefits. Excluding those benefits, the acquisition is valued at $2.2 billion.
Hampton Roads
Amerigroup says TLC buy complete
VIRGINIA BEACH | Managed-care provider Amerigroup Corp. said Thursday that it completed its acquisition of assets of a Memphis, Tenn., company that provides managed care to 167,000 low-income residents of western Tennessee. Management of the Memphis company, which does business as TLC Family Care Health Plan, remains in place.
Virginia Beach-based Amerigroup, which now provides managed care for participants in the state’s TennCare program in the Nashville region, has said it will bid later this year when TennCare seeks managed-care providers to serve western Tennessee. Amerigroup also said it will begin operating in South Carolina on Thursday when its health care plan for the Columbia, S.C., region opens.
– Tom Shean
waterside invests in card company
norfolk | Waterside Capital Corp., a Norfolk small-business investment company, said Thursday that it made an initial $450,000 equity investment in Decipher Inc., a Norfolk producer of game- trading cards, including cards involving “Lord of the Rings,”"Star Trek” and “Star Wars” games.
The investment will be used to restructure Decipher’s debt and enable the company to grow, Waterside said. Decipher, it said, had been hurt by changes in the trading-card industry and management issues. However, the company has the people, know-how and connections to recover its stature in the industry, Lin Earley, Waterside’s chief executive officer, said in a statement.
– Tom Shean
Amsec awarded work on ships
VIRGINIA BEACH | Amsec LLC, a subsidiary of Northrop Grumman Newport News, has won a $3.5 million contract to provide engineering, logistics and technical services work on various Navy ships.
The work, in support of the Naval Surface Warfare Center in Philadelphia, involves maintenance and modernization of electrical power systems on nuclear-powered aircraft carriers, amphibious assault ships and destroyers, cruisers and frigates. Amsec will oversee systems integration for equipment and component upgrades and provide engineering services for new equipment and technology development.
Work will occur in Norfolk; San Diego; Mayport, Fla.; and Washington state.
– Jon W. Glass
firm wins work at naval station
Newport News-based general contractor W.M. Jordan Co. Inc. has won a $25.8 million Navy task order for work on bachelor enlisted housing at Norfolk Naval Station.
It involves repairs and renovations to Building 022, including work on three six-story tower wings and its central core section.
Two firms bid on the job, which was awarded by Naval Facilities Engineering Command, Mid-Atlantic, in Norfolk. Work should be finished by March 2009.
– Jon W. Glass
nation
consumers slow spending growth
WASHINGTON | The Commerce Department reported Thursday that consumer spending rose by 0.3 percent in September, the smallest rise in three months and lower than the 0.4 percent increase analysts expected. The 0.4 percent gain in incomes was in line with expectations.
In another report, the Institute for Supply Management said its manufacturing index dipped to 50.9 in October. That was the weakest level since March and the fourth consecutive month that manufacturing has slowed. Any reading lower than 50 indicates that the manufacturing portion of the economy is in recession.
The Labor Department reported that the number of newly laid off workers filing claims for unemployment benefits dropped by 6,000 last week to 327,000. But the four-week average for claims climbed by 1,750 to 327,000, a six-month high.
american airlines raises fares $20
NEW YORK | American Airlines sparked a new round of airfare increases Thursday by raising domestic round-trip prices $20, the biggest in a series of increases by U.S. carriers since summer.
The nation’s largest airline said it was trying recover some of the costs associated with the rising price of crude oil and jet fuel.
Delta Air Lines followed American’s lead with its own increases Thursday. Other carriers, such as No. 2 United Airlines, said they were studying the move but had not yet decided whether to raise their own prices. In a separate move, AirTran Airways raised its fares by $5 to $10 one-way Wednesday. Delta also matched that increase.
u.s. house panel backs tax measure
The House Ways and Means Committee approved a plan to raise taxes on executives of hedge funds and private-equity firms by $49.5 billion over the next decade to prevent a separate tax increase on middle-income families this year.
The tax-writing panel voted 22-13 to approve a $77 billion tax measure that would block the alternative minimum tax from imposing $50.6 billion in new levies on millions of households this year.
– From staff and wire reports
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