March 13, 2005

Philip Morris International Inc. (PMI) announces agreement to purchase 40% stake in PT HM Sampoerna Tbk, Indonesia’s third largest tobacco company

Public tender offer to be made for 100% of remaining shares at Rp. 10,600 per share (USD 1.13); a premium of 20%

Transaction valued at approximately Rp. 48 trillion (USD 5.2 billion) including net debt of approximately Rp. 1.5 trillion (USD 160 million)

Philip Morris International Inc. (PMI), the international tobacco operating company of Altria Group, Inc. (NYSE:MO) today announced that it has entered into agreements to acquire a 40% stake in Indonesian kretek cigarette manufacturer PT HM Sampoerna Tbk (Sampoerna) from a number of Sampoerna’s principal shareholders, and will proceed to make a public tender offer for 100% of the remaining shares at a price per share of Rp. 10,600 (USD 1.13 per share), a premium of 20% over the price of Rp. 8,850 (USD 0.95) on Thursday, 10 March 2005.

Assuming that all shares are tendered, the transaction values Sampoerna at approximately Rp. 48 trillion (USD 5.2 billion) including net debt of approximately Rp. 1.5 trillion (USD 160 million). PMI said that it will pay cash for all shares tendered and expects the transaction, when completed, to be modestly accretive in 2005 to the diluted earnings per share of Altria Group, Inc. The transaction will be debt financed through a bank credit facility arranged for PMI and its subsidiaries. The tender offer is expected to be completed within approximately 90 days and is subject to customary regulatory review.

Sampoerna is Indonesia’s third largest tobacco company, with estimated domestic tobacco volume of 41 billion units in 2004, generating net revenues of approximately Rp. 9.0 trillion (USD 1.0 billion). Its operating income was estimated at approximately Rp. 3.1 trillion (USD 360 million) in 2004, up 19.5% versus the prior year. Sampoerna has strong kretek cigarette brands, including Dji Sam Soe and A Mild, and held a 19.4% share of the market in 2004. Its shares are listed in Indonesia on the Jakarta and Surabaya exchanges. Kreteks are cigarettes made with tobacco and cloves, and represent 92% of the total Indonesian cigarette market, which is estimated at more than 200 billion units annually.

“Our investment in Sampoerna is a great opportunity to significantly expand our business in the world’s fifth largest and growing cigarette market,” said André Calantzopoulos, President and Chief Executive Officer of PMI. “Today’s announcement reflects our confidence in the economic future of Indonesia and its tobacco industry and positions us for profitable future growth by partnering with a well managed and successful company that has an outstanding distribution and manufacturing infrastructure.”

“This is an excellent development for our shareholders and employees,” said Putera Sampoerna, President Commissioner of Sampoerna. “PMI is well known as a successful and responsible manufacturer and marketer of quality tobacco products.”

“We look forward to working with the employees of Sampoerna and are especially pleased that Putera Sampoerna has agreed to serve as special adviser to the board through the integration period and beyond,” said Matteo Pellegrini, President for the Asia Pacific region of PMI. “The action we are taking today reflects our decision to enter the large and profitable kretek cigarette segment in Indonesia. We intend to further invest in Sampoerna’s infrastructure and will continue to build the brand equity of its strong and well established brands. We have the highest regard for Sampoerna, its employees and its strong heritage.”

Highlights of the transaction

PT Philip Morris Indonesia, an affiliate of PMI, has executed sale and purchase agreements under which it will acquire a 40% stake in Sampoerna at a price per share of Rp. 10,600 (USD 1.13), representing a total of Rp. 18.6 trillion (USD 2.0 billion) from a number of Sampoerna’s principal shareholders. PT Philip Morris Indonesia will make a public tender offer for 100% of the remaining issued and paid up shares of Sampoerna. The tender offer process will be subject to applicable Indonesian laws and regulations. The transaction values Sampoerna at approximately Rp. 48 trillion (USD 5.2 billion), based on all shares being purchased at a price per share of Rp. 10,600 (USD 1.13 per share), an exchange rate of Rp. 9,365 per USD, and the assumption of Sampoerna’s net debt of approximately Rp. 1.5 trillion (USD 160 million). The tender price being offered is 20% higher than the closing price of Sampoerna’s shares on Thursday, 10 March 2005.

Financial and legal advisers

PMI’s financial adviser for the transaction was Credit Suisse First Boston. Legal counsel was provided by Clifford Chance LLP and Mochtar Karuwin Komar.

Philip Morris International Inc.

Philip Morris International Inc., headquartered in Lausanne, Switzerland, currently holds a 14.5% share of the international cigarette market. Its brands, led by Marlboro and L&M, are manufactured in more than 60 factories around the world and sold in over 160 countries. PMI is an operating company of Altria Group, Inc. More information is available at

2004 results

Net revenues: USD 39.5 billion

Operating companies income: USD 6.6 billion

Unit volume: 761.4 billion

Worldwide market share: 14.5%

PT HM Sampoerna Tbk

PT HM Sampoerna Tbk was founded in 1913 and today is Indonesia’s third largest tobacco company with a 19.4% cigarette market share in 2004. Sampoerna’s shares are listed on the Jakarta and Surabaya exchanges. Sampoerna’s market capitalization was approximately Rp. 35.7 trillion (USD 3.8 billion) as of the end of February 2005. Its principal activity is the manufacture and sale of kreteks, which are cigarettes made with tobacco and cloves. Dji Sam Soe and A Mild are the core brands in Sampoerna’s premium portfolio, while Sampoerna A Hijau competes in the medium price segment. Sampoerna operates three major cigarette manufacturing facilities in Indonesia. Its main facility is located in Pandaan, a central location between Surabaya and Malang in East Java. The other two are in Surabaya and Malang.

2004 estimated results, domestic tobacco

Net revenues: Rp. 9.0 trillion (USD 1.0 billion)

Operating income: Rp. 3.1 trillion (USD 360 million)

Unit volume: 41 billion

Share of total Indonesian market: 19.4%

Source: PMI estimates

Forward-looking and cautionary statements

This press release contains projections of future results and other forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The following important factors could cause actual results and outcomes to differ materially from those contained in such forward-looking statements.

Altria Group, Inc.’s consumer products subsidiaries are subject to changing prices for raw materials; intense price competition; changes in consumer preferences and demand for their products; fluctuations in levels of customer inventories; the effects of foreign economies and local economic and market conditions; and unfavourable currency movements. Their results are dependent upon their continued ability to promote brand equity successfully; to anticipate and respond to new consumer trends; to develop new products and markets and to broaden brand portfolios in order to compete effectively with lower-priced products; to improve productivity; and to respond effectively to changing prices for their raw materials.

Altria Group, Inc.’s tobacco subsidiaries (Philip Morris USA Inc. and Philip Morris International Inc.) continue to be subject to litigation, including risks associated with adverse jury and judicial determinations, courts reaching conclusions at variance with the company’s understanding of applicable law, bonding requirements and the absence of adequate appellate remedies to get timely relief from any of the foregoing; price disparities and changes in price disparities between premium and lowest-price brands; legislation, including actual and potential excise tax increases; increasing marketing and regulatory restrictions; the effects of price increases related to excise tax increases and concluded tobacco litigation settlements on consumption rates and consumer preferences within price segments; health concerns relating to the use of tobacco products and exposure to environmental tobacco smoke; governmental regulation; privately imposed smoking restrictions; and governmental and grand jury investigations.

Altria Group, Inc.’s consumer products subsidiaries are subject to other risks detailed from time to time in its publicly filed documents, including its Quarterly Report on Form 10-Q for the period ended September 30, 2004. Altria Group, Inc. cautions that the foregoing list of important factors is not complete and does not undertake to update any forward-looking statements that it may make.

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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.

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