BENGALURU, July 9 (Reuters) - Altria Group Inc said on Friday it would sell its Ste. Michelle Wine Estates business to private equity firm Sycamore Partners Management for $1.2 billion as the tobacco giant looks to focus its business on cigarette alternatives for smokers.
As the popularity of cigarettes fall in the United States, especially among youngsters, Altria has been developing its line of dipping tobacco, nicotine pouches and other smokeless oral tobacco products.
However, Altria has taken a heavy it from its $12.8 billion investment in e-cigarette maker Juul Labs, as an increase in regulatory scrutiny caused the value of the company to nosedive.
Ste. Michelle, which sells wine from estates in Washington State, Napa Valley and other parts of the United States, became part of Altria when the company bought smokeless tobacco company UST in 2008.
"We believe the transaction is an important step in Altria's value creation for shareholders and allows our management team greater focus on the pursuit of our Vision to responsibly transition adult smokers to a non-combustible future," Billy Gifford, Altria's Chief Executive Officer, said.
The deal is expected to close in the second half of 2021.
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