Altadis AGM Agrees to Modify Corporate Structure.

PARIS -- Altadis (Other OTC:ALTDF)

--Jean-Dominique Comolli will be Chairman of the Board and Antonio Vazquez will assume all executive functions.

--AGM agrees to the amortization of 4.9% of share capital and authorizes the acquisition of an additional 5%.

--Dividends of 0.90 Euro per share will be distributed, up 12.5% from last year.

The Altadis Annual General Shareholders' Meeting held today in Madrid has approved the modification of corporate structure proposed by the Board of Directors on June, 6th. According to the agreement, the Board will name Jean-Dominique Comolli as new Chairman, both of the Board itself and of the newly-created Strategic, Ethical and Good Governance Committee. Antonio Vazquez will be named Chairman of the Executive Committee and CEO of the Group, assuming all executive functions.

At the same time, two Directors will be named Vice-Chairmen of the Board. The mentioned Strategic, Ethical and Good Governance Committee will be created in addition to those already in existence for Audit and Control and for Appointments and Compensation. The new Committee will be chaired by the Chairman of the Board, Jean-Dominique Comolli, and compounded, among others, by the two Vice-Chairmen and the Chairman of the Executive Committee, Antonio Vazquez.

In his AGM address, Antonio Vazquez stated that "this modification of the corporate structure comes when the co-chairmanship model has given its best results and has usefully and fruitfully contributed to the international development and positioning of our company." He also added, "The new structure has been conceived in accordance with the principle of separation of functions, which inspires the most internationally accepted Corporate Governance guidelines. This will allow for greater flexibility, which is absolutely necessary at this stage."

"This new organization," Antonio Vazquez specified, "was clearly required by the market, and led us to adapt our management structures to the new realities we are facing, in the context of mature markets and of an increasingly restrictive regulatory framework."

In line with its shareholder value creation policy, the AGM also approved the amortization of 4.9% of share capital and the acquisition of an additional 5%. The amortization implies reducing the Company's share capital by 14 million shares, due to which the number of company shares at this time is 269,221,426.

The shareholders also approved the distribution of a dividend of 0.90 Euro per share, which represents a 12.5% increase on last year. Of this amount, 0.40 Euro per share were paid in March, and the remaining 0.50 Euro were distributed on June, 21st. The Group has proven its commitment to a specific dividend policy benefiting the shareholders and to a regular increase of the dividends by over 10%.

The AGM has also approved the creation of a free shares granting Plan for Executive Directors, managers and employees, empowering the Board for its application, execution and development. This Plan, consisting of the distribution of Company shares, will have a maximum duration of three years and will not exceed 1% of the share capital at June, 1st 2005.

The AGM has approved the consolidated accounts for 2004, a period in which the Company has continued to grow for the fifth consecutive year. The accounts reflect a 4% growth in economic sales, totaling 3,518 million Euro; a 3.3% increase in Ebitda, to 1,113 million Euro; and net profits, already adapted to IFRS, of almost 540 million Euro.

During his address, Antonio Vazquez defined the creation of value as "the cornerstone of the Company," and mentioned the aspects on which value creation is based in Altadis: a sensible and balanced external growth policy, an organic growth policy for sales and results in each of the three business units with a constant costs reduction, a specific dividend policy, a lasting share buy-back and amortization policy. A special attention to Corporate Governance norms, to transparency and corporate social and environmental responsibility are also key to creating value.

At the end of his address, Antonio Vazquez made special mention of the increase in Altadis share price, regarding which he highlighted that "our value creation policy allowed for Altadis stock to rise by 49.78% in 2004. In fact, our average rate of growth in share value over the last five years was 18.9%, while during the same period the Ibex fell an annual average 4.8%."

Attachments to the press release are available on http://www.companynewsgroup.com