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Brooke sells cigarette lines
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November 20, 1998: 4:02 p.m. ET
Philip Morris to acquire 3 premium Liggett brands for $300M in cash
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NEW YORK (CNNfn) - Brooke Group Ltd. Friday said it has reached an agreement to sell three of its Liggett Group Inc.'s cigarette brands to tobacco giant Philip Morris Co. for $300 million in cash.
The deal comes on the heels of a landmark $206-billion tobacco settlement involving 46 states and five U.S. territories. Brooke and Liggett were involved in that settlement.
Under terms of the agreement, Philip Morris will acquire Liggett's L&M, Chesterfield and Lark brands, three of its four premium cigarette brands.
Brooke said it expects Philip Morris to make an initial payment of $150 million within 10 days as an option fee, with the balance to be paid upon exercise of the options by Philip Morris.
Philip Morris already owns the international rights to the three Liggett brands.
Under terms of the tobacco settlement, Brooke and Liggett will have no payment obligation to the states if Liggett's national market share does not exceed 1.67 percent. With the brands being sold, the company has about a 2 percent share of the national cigarette market.
The company said the L&M, Chesterfield and Lark brands accounted for 14 percent of Liggett's annual sales.
Liggett will continue to own several discount and private-label brands as well as its remaining premium brand, Eve.
Brooke Group (BGL) shares rose 13/16 to 11 in late-day trading. Philip Morris (MO) shares gained 5/16 to 55-11/16. 
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