Philp Morris Acquires Control of Papastratos for EUR 368 Million.

Business Editors

LAUSANNE, Switzerland--(BUSINESS WIRE)--Oct. 15, 2003

Philip Morris International's affiliate, Philip Morris Holland, has completed a private transaction with a group of principal shareholders for a 76.5% shareholding in the Greek company Papastratos Cigarette Manufacturing S.A. at the price of EUR18.02 per share, representing a total cash consideration of EUR368 million.

The acquisition of Papastratos follows nearly 30 years of a close working relationship between the two companies. Papastratos was established in 1930 and is the largest manufacturer and distributor of cigarettes in Greece. Papastratos produces and markets cigarettes including the Assos International, President, Old Navy, Cosmos, Saga, and Papastratos brands.

Andre Calantzopoulos, Philip Morris International's President and CEO, said: "I am extremely pleased with this acquisition of Papastratos. We have high regard for the excellent reputation of the company and its employees and full appreciation of its Greek heritage. The attractive Papastratos brands complement our international brands on the Greek cigarette market, and we look forward to growing the combined business, building on our decades-long, successful relationship with Papastratos."

Christos K. Komninos, former Chairman and current member of the Board of Papastratos, said: "We have now started a new chapter for Papastratos in Greece. The management team and employees are excited about working with Philip Morris and continuing Papastratos' success in the market."

In accordance with Greek securities regulations, Phillip Morris Holland will launch a mandatory public tender offer for the remaining shares in Papastratos. The price to be offered in the public tender offer will be EUR18.02 per share, the same price agreed between Philip Morris Holland and the principal shareholders selling the 76.5% stake in the company. Philip Morris Holland will maintain the price of EUR18.02 per share throughout the tender offer period.

Philip Morris Holland confirmed its intention to continue making open market purchases of Papastratos shares at prices up to EUR18.02 per share until the end of the tender offer period. Including the shares Philip Morris Holland has acquired in the meantime through open market purchases, at the close of trading today Philip Morris Holland owned approximately 79.4% of shares in Papastratos.

Information on Philip Morris International 

Philip Morris International is one of the operating companies of Altria Group, Inc. Philip Morris International, based in Lausanne, Switzerland, is a leading tobacco company outside the United States. Philip Morris International produces and markets some of the world's most popular cigarette brands, including Marlboro, L&M and Chesterfield.