Altria Group, Inc. has announced significant changes in its financial metrics and strategies in a recent press release. The company has agreed to sell 35 million shares of Anheuser-Busch InBev SA/NV (ABI) through a global secondary offering, which is comprised of public and private offerings at a price of $61.50 per ADS, totaling approximately $2.4 billion. Additionally, ABI will repurchase $200 million of ordinary shares directly from Altria. As a result, Altria has decided to significantly enhance cash returns to shareholders by increasing its existing $1 billion share repurchase program by $2.4 billion.
Following the offering and share repurchase by ABI, Altria's remaining ownership of ABI will be approximately 8.1%, or approximately 7.8% assuming full exercise of the underwriters' option to purchase additional shares. Altria estimates that it will own approximately 159 million shares of ABI following the offering and the share repurchase by ABI. The company has also agreed to a 180-day lockup with the lead underwriter for its remaining ABI shares and expects to maintain two seats on ABI's board of directors.
Regarding financial flexibility and cash returns to shareholders, Altria expects cash savings from the elimination of future dividend payments on the repurchased shares of its common stock. These savings may be utilized for general corporate purposes, including investments in the company's vision, debt repayment, or further cash returns to shareholders. The company remains committed to its progressive dividend goal that targets mid-single digits dividend per share growth annually through 2028.
Altria has raised its 2024 full-year adjusted diluted earnings per share (EPS) guidance to be in a range of $5.05 to $5.17, representing a growth rate of 2% to 4.5% from a base of $4.95 in 2023. The guidance reflects the estimate for lower 2024 weighted-average shares outstanding, partially offset by lower equity earnings related to the reduced ownership of its investment in ABI. Altria expects the 2024 adjusted diluted EPS growth to be weighted to the second half of the year and includes the impact of two additional shipping days in 2024.
The company stated that the 2024 full-year adjusted diluted EPS guidance range includes planned investments in support of its vision, such as marketplace activities in support of smoke-free products and continued smoke-free product research, development, and regulatory preparation expenses. Notably, the guidance excludes estimated net income of approximately $0.2 billion for the partial sale of Altria's investment in ABI, as well as an estimated per share gain of $1.17 related to the sale of the IQOS tobacco heating system commercialization rights that the company expects to record in the second quarter of 2024.
The market has reacted to these announcements by moving the company's shares 2.0% to a price of $44.22. Check out the company's full 8-K submission here.
