August 3, 2003

Philip Morris International to acquire 66.45% of Duvanska Industrija Nis in Serbia

Philip Morris International Inc. (PMI) announced today that the Serbian Privatization Agency had declared PMI the winning bidder in the tender privatization and invited PMI to negotiate details of the sale and purchase agreement to acquire 66.45% of Duvanska Industrija Nis (DIN) for 387 million euros.

PMI’s President and CEO André Calantzopoulos said, “We are delighted that Duvanska Industrija Nis will become a part of the PMI family. DIN is the clear market leader in the 20 billion unit Serbian market, with a market share of 62% during the first half of 2003. DIN has delivered substantial volume and income growth over the past two years, fuelled by its three leading brands - Classic, Best and Drina. We are confident we can further accelerate this growth.”

“The acquisition will also allow PMI to realize the full potential of Marlboro and its other international trademarks in the Serbian market. The new Serbian excise tax system provides a significant incentive to manufacture locally, as well as an attractive and predictable operating environment”, Calantzopoulos said. “This gives us excellent opportunity for strong volume and income growth. PMI has a long history of successfully integrating formerly state-owned tobacco companies and delivering considerable long-term value. The DIN acquisition also significantly enhances our overall presence in South East Europe.”

“We look forward to working together with the management and employees of DIN and to becoming a valued member of the community in Nis and Serbia,” Calantzopoulos said.

As everywhere in the world, PMI is committed to responding to societal expectations in Serbia by supporting effective tobacco regulation. PMI takes many actions to ensure that its products are marketed responsibly and to communicate with consumers regarding important tobacco issues.

Philip Morris International

Philip Morris International (PMI) is one of the operating companies of Altria Group, Inc. Based in Lausanne, Switzerland, Philip Morris International is a leading tobacco company outside the United States.

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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