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Altria Group Acquires Nat Sherman

Jan 17, 2017 | By Gregory Mottola
Altria Group Acquires Nat Sherman

The "tobacconist to the world" has just been purchased. Tobacco giant Altria Group Inc. has acquired the privately held Sherman Group Holdings, and its entire portfolio of Nat Sherman branded high-end cigarettes and premium cigars, including Nat Sherman Timeless, Nat Sherman Metropolitan and Nat Sherman Panamericana.

Terms of the deal were not disclosed.

"Nat Sherman has a terrific brand portfolio which complements Altria's existing smokable product segment," said Marty Barrington, Altria's chairman, CEO and president. "Nat Sherman will benefit from the retail distribution, brand management and adult tobacco consumer engagement expertise of Altria's companies."

"We welcome Nat Sherman and its talented employees to the Altria family of companies and look forward to swiftly executing our plans," Barrington added.

Nat Sherman was founded in 1930 as a family-owned and operated business. Its flagship store, the Nat Sherman Town House in midtown Manhattan, is a lux cigar shop whose bronze clock has become a symbol of New York City.

Although Nat Sherman cigarettes are manufactured in Greensboro, North Carolina, its premium cigars (an entirely different division) are produced in the Dominican Republic and Nicaragua.

The business is run by company patriarch and CEO, Joel Sherman, and his children, Larry, Bill and Michelle.

"We are excited to have our family's business join the Altria family of companies," said Nat Sherman's executive vice president, Bill Sherman. "We believe Altria will be a great steward of the Sherman company and its brands."

This is not the first time a tobacco giant has moved into the premium cigar sector. In 2014, Swisher International, the maker of Swisher Sweets, acquired Drew Estate and its entire line of premium, handmade cigars.

"Nat Sherman's super-premium cigarette brands will assist Altria in more effectively competing in the super-premium cigarette segment," said Altria spokesman Steven Callahan. "And it has a nice premium cigar business as well." Nat Sherman cigars are the only premium, handmade smokes under Altria's umbrella.

According to Callahan, Altria has no intention on moving Nat Sherman's headquarters out of New Jersey or relocating its cigarette manufacturing operation. The flagship store in midtown Manhattan was part of the deal and now belongs to Altria.

Altria is best known for its subsidiary Philip Morris USA Inc., makers of Marlboro brand cigarettes. According to the U.S. government, Marlboro has 41 percent of the U.S. cigarette market—more than the next eight largest brands combined.

The brand portfolios of Altria's tobacco operating companies include Black & Mild machine-made cigars, and smokeless tobaccos such as Copenhagen and Skoal. Altria acquired John Middleton Inc., the maker of Black & Mild machine-made cigars, for $2.9 billion in 2007.

Altria had revenues of $25.4 billion in 2015, with $8.3 billion in operating income and net profits of more than $5 billion. Both profits and revenues were up over 2014 numbers. The company will report its 2016 financials next month.

Nat Sherman International Inc.
"Oh No! Not my Nat Sherman cigarettes. I just got a new carton of Nat Sherman Naturals. Except they are no longer called Naturals and the pack no longer states 100% tobacco. I hope they don't taste like/ nor rot my lungs like... Marlboro" —March 21, 2017 22:33 PM
"Davidoff, CAO, Oliva, Room 101, Drew Estate, Nat Sherman. Does anyone else see a trend here?" —January 22, 2017 15:43 PM
"I agree Tony, I find the timing of selling to a large conglomerate just a few months after the FDA intruded into the cigar business, both ironic and discouraging. " —January 22, 2017 15:41 PM
"You can thank the FDA for this." —January 18, 2017 07:16 AM
"not good , saying" —January 17, 2017 22:04 PM
"I smell a promotion for Herklots...or the axe. " —January 17, 2017 19:19 PM
"I smell a promotion for Herklots...or the axe. " —January 17, 2017 19:19 PM
"What's next snuff, chewing Tabasco? Come on give us a break. This reminds me of the Vietnam era, 18 old enough to die but can't buy a beer! F.U.B.R." —January 17, 2017 18:59 PM
"A bad day for a great old family business. I won't patronize Nat Sherman any longer, since it is no longer Nat Sherman." —January 17, 2017 18:23 PM

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