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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 22, 2000
PHILIP MORRIS COMPANIES INC.
(Exact name of registrant as specified in its charter)
Virginia 1-8940 13-3260245
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
120 Park Avenue, New York, New York 10017-5592
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (917) 663-5000
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
In June 2000, Philip Morris Companies Inc. (the "Company") entered into
definitive agreements to acquire all of the outstanding shares (the "Shares") of
Nabisco Holdings Corp. ("Nabisco") for $55 per share in cash. The transaction
reflects an aggregate cost of approximately $19.2 billion, which includes the
assumption of approximately $4.0 billion in net debt. The acquisition will be
financed initially through a combination of available cash balances and short-
term debt. The transaction, which has been approved by the shareholders of
Nabisco Group Holdings Corp. and by the European Commission, remains under
review by United States antitrust authorities. The parties are working to close
the transaction by year-end. The acquisition will be accounted for as a
purchase.
Subsequent to the acquisition, the Company's wholly owned subsidiary,
Kraft Foods, Inc. ("Kraft") plans to undertake an initial public offering
("IPO") of less than 20% of the combined food company. The IPO proceeds will be
used to retire a portion of the debt incurred as a result of the acquisition of
Nabisco.
This Current Report on Form 8-K of the Company is being filed to make
publicly available certain preliminary information with respect to the Company's
acquisition of Nabisco, including certain historical and pro forma financial
data.
See Exhibit 99.1 for pro forma financial information giving effect to the
acquisition.
Nabisco is a major international manufacturer of biscuits, snacks, and
premium grocery products, including such well-known U.S. brands as Oreo,
Premium, and Chips Ahoy!; Ritz crackers; A.1. steak sauces; Grey Poupon
mustards; Life Savers and Trolli confections; Planters nuts and snacks; and
Milk-Bone dog treats. International products include Christie, Peek Freans,
Terrabusi cookies and crackers; Fleischmann's yeast; and several Nabisco global
brands - Oreo, Ritz and Chips Ahoy!. Nabisco markets products in the United
States and more than 85 other countries.
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FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This Form 8-K contains forward-looking statements. One can identify these
forward-looking statements by use of words such as "expects," "plans,"
"believes," "will," "estimates," "intends," "projects," "goals" and other words
of similar meaning. One can also identify them by the fact that they do not
relate strictly to historical or current facts. In connection with the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company is hereby identifying important factors that could cause actual results
and outcomes to differ materially from those contained in any forward-looking
statement made by or on behalf of the Company; any such statement is qualified
by reference to the following cautionary statements.
The tobacco industry continues to be subject to health concerns relating to
the use of tobacco products and exposure to environmental tobacco smoke,
legislation, including actual and potential excise tax increases, increasing
marketing and regulatory restrictions, governmental regulation, privately
imposed smoking restrictions, governmental and grand jury investigations,
litigation, including risks associated with adverse jury and judicial
determinations, courts reaching conclusions at variance with the Company's
understanding of applicable law, bonding requirements and the absence of
adequate appellate remedies to get timely relief from any of the foregoing, and
the effects of price increases related to concluded tobacco litigation
settlements and excise tax increases on consumption rates. Each of the Company's
consumer products subsidiaries is subject to intense competition, changes in
consumer preferences, the effects of changing prices for its raw materials and
local economic conditions. Their results are dependent upon their continued
ability to promote brand equity successfully, to anticipate and respond to new
consumer trends, to develop new products and markets and to broaden brand
portfolios, in order to compete effectively with lower priced products in a
consolidating environment at the retail and manufacturing levels, and to improve
productivity. In addition, Philip Morris International Inc., Kraft Foods
International, Inc. and Kraft are subject to the effects of foreign economies
and the related shifts in consumer preferences, and currency movements. There
can be no assurance that the acquisition by the Company of all of the
outstanding Shares of common stock of Nabisco or the IPO of less than 20% of
Kraft's common stock will be consummated, or consummated within a particular
time frame. Developments in any of these areas, which are more fully described
in the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2000, could cause the Company's results to differ materially from results
that have been or may be projected by or on behalf of the Company. The Company
cautions that the foregoing list of important factors is not exclusive. The
Company does not undertake to update any forward-looking statement that may be
made from time to time by or on behalf of the Company.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) and (b) Historical Financial Statements and Pro Forma Financial Information:
Not Applicable.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of June 25, 2000, among
Nabisco Holdings Corp., Philip Morris Companies Inc. and Strike
Acquisition Corp., incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 2000.
2.2 Voting and Indemnity Agreement, dated as of June 25, 2000, among
Nabisco Group Holdings Corp., Philip Morris Companies Inc. and
Nabisco Holdings Corp., incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 2000.
99.1 Pro Forma Condensed Combined Financial Information (unaudited).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILIP MORRIS COMPANIES INC.
By: /s/ G. PENN HOLSENBECK
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G. Penn Holsenbeck
Vice President, Associate General
Counsel and Corporate Secretary
DATE: November 22, 2000
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