U.S. Tobacco Co. Trims Holdings

The United States Tobacco Co. has announced an agreement to sell distribution rights for Zig-Zag cigarette papers and related products to the North Atlantic Trading Co. Ltd.

UST Inc., the holding company for United States Tobacco, will get $39 million in cash and additional considerations based on future earnings for the next 10 years.

The divestiture is in line with UST’s strategy of focusing on the principal products in its core businesses.

U.S. Tobacco’s cigarette paper business represents about 3% of its total revenue. The transaction is expected to be completed and reflected in the first quarter of 1993.

UST, through its subsidiaries, is a leading producer and marketer of moist tobacco products, including such brands of snuff as Copenhagen, Skoal, Skoal Long Cut and Skoal Bandits.