Altria Fires Up Cigar Business

Altria Group (MO Quote) is puffing up its tobacco business to include cigars.

The owner of the Philip Morris tobacco behemoth said Thursday that it agreed to buy John Middleton, a maker of machine-made cigars, for $2.9 billion in cash.

John Middleton makes cigars under the Black & Mild name, the second-biggest-selling cigar brand in the U.S., according to Altria. The company's operating revenue is expected to reach $360 million in 2007.

The purchase comes as Altria is preparing to spin off its international tobacco division in hopes that it will be able to grow more quickly without the legal battles and regulatory headaches faced in the U.S. over cigarettes. Altria, whose cigarette brands include Parliament and Marlboro, said the cigar deal will enhance its long-term growth in the U.S. market. ...