Loews to spin off Lorillard in stock exchange

By Lisa Kerner

Charlotte, N.C., Dec. 17 - Loews Corp. plans to spin off its interest in Lorillard, Inc. to holders of its Carolina Group stock and Loews common stock in a tax-free transaction, it was announced on Monday.

The transaction would be accomplished through the following steps:

• Loews would redeem all of the outstanding Carolina Group stock in a one-for-one exchange for shares of Lorillard common stock;

• The company would dispose of the remaining 38% of Lorillard's outstanding common stock in an exchange offer for shares of outstanding Loews common stock, depending on market conditions. If Loews does not effect the exchange offer or the exchange offer is not fully subscribed, the remaining shares of Lorillard would be distributed as a pro rata dividend to the holders of Loews common stock; and

• Lorillard, a wholly owned subsidiary of Loews, would become a separately traded company led by its current chairman, president and chief financial officer Martin Orlowsky. The company headquarters would remain in Greensboro, N.C.

"This transaction is consistent with our unrelenting focus on long-term value creation," Loews chief executive officer James S. Tisch said in a company news release.

"A spin-off of Lorillard will benefit both companies as well as the holders of Loews common stock and Carolina Group stock."

Loews is a New York-based energy, financial services and tobacco conglomerate.

Lorillard, through its subsidiaries, produces and sells cigarettes under brand names including Newport, Kent and Old Gold.

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