Know Your Market

September 5, 2008

Kessler, COO of UST, speaks at the Reuters Retail Summit in New YorkThe Lehman Brothers Back-To-School conference isn’t really about selling to kids, so maybe it wasn’t the worst thing to happen to UST, the tobacco company that owns Joe Camel, when CEO Murray Kessler (pictured left) lit out of the conference to try to close a deal with suitor Altria. The New York Times says the deal is worth $10 billion. Putting the maker of Copenhagen and Skoal firmly in the cheek of the cigarette giant has been talked about long enough to wear a hockey-puck sized circle in the back pocket of any banker’s jeans. (For those of you uninitiated in smokeless tobacco, that’s the mark a tin of tobacco makes in your favorite Levis). Sources said in February that a deal between the two may be only months away, but the two sides were haggling over price. The deal would be Altria’s first major purchase since it split from its international operations, now known as Philip Morris International. The FT’s Alphaville notes that UST owns Ste Michelle Wine Estates, one of the 10 largest producers of premium wines in the US. Another product that would be poorly placed at a back-to-school conference.

Other deals of the day:

* A consortium led by Japanese trading house Marubeni Corp is poised to win an auction to buy Singapore’s Temasek-owned Senoko Power, with an offer of more than S$3.5 billion ($2.4 billion), sources said.

* GDF Suez is in exclusive talks with the Dutch NAM oil venture, owned by Royal Dutch Shell and Exxon Mobil, to buy offshore assets worth 1.075 billion euros ($1.54 billion), the French utility said.

* Shanghai Zhenhua Port Machinery said it will buy operating assets worth 3.02 billion yuan ($442 million) from its parent via a private placement.

* French utility EDF has moved closer to a deal to buy nuclear generator British Energy after fruitful talks with some of the company’s biggest investors, the Financial Times said.

* Dell Inc is trying to sell computer factories around the world in efforts to cut cost and improve profitability, the Wall Street Journal said.

* Samsung Electronics, the world’s top maker of memory chips, said it may buy flash memory maker SanDisk, which is valued at $3.2 billion, in a deal that could reshape a struggling industry.

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