October 14, 2003

Philip Morris acquires control of Papastratos for €368 million

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 €18.02 per share, representing a total cash consideration of €368 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.

André 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, Philip 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 €18.02 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 €18.02 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 €18.02 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.

About philip morris international inc.

PMI is the world’s leading international tobacco company, with six ot the world’s top 15 international brands and products sold in more than 180 markets. In addition to the manufacture and sale of cigarettes, including Marlboro, the number one global cigarette brand, and other tobacco products, PMI is engaged in the developement and commercialization of Reduced-Risk Products (RRPs). RRPs is the term PMI uses to refer to products with the potential to reduce individual risk and population harm in comparison to smoking cigarettes. Through multidisciplinary capabalities in product development, state-of-the-art facilities, and indusrty-leading scientific substantiation, PMI aims to provide an RRP portfolio that meets a broad spectrum of adult smoker preferences and rigorous regulatory requirements.

For more information

See pmi.com and pmiscience.com

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