Altria Group said on Wednesday it plans to spin off its international tobacco unit but will not give details on the timing on the much anticipated move until January.
The company also raised its quarterly dividend by 8.7 percent to 75 cents per share, less than the 10 percent increase some analysts had been expecting.
Altria shares gave up their early gains and were down 11 cents at $68.96 in mid-morning trade on the New York Stock Exchange. The stock traded as high as $70.98 earlier in the day.
The spinoff is the second in a corporate restructuring that has seen Altria spin off its Kraft Foods Inc holdings.
The Philip Morris International business is seen as having better growth opportunities, especially in emerging markets, than the Philip Morris USA business. U.S. cigarette consumption has fallen steadily since 1981.
Altria said its board expects to be able to finalize the spinoff decision at its January 30 board meeting.
The spinoff will be subject to the receipt of a favorable ruling from the Internal Revenue Service, as well as other factors.
When the spinoff is completed, Altria expects that Michael Szymanczyk will be appointed chairman and chief executive officer of Altria Group Inc., and Louis Camilleri will assume that role at Philip Morris International Inc. Camilleri is currently chairman and CEO of Altria Group, and Szymanczyk is chairman and CEO of Philip Morris USA.
Altria scheduled a conference call with investors and the media for later on Wednesday to discuss the spinoff.