Altria's former CEO weighs in on UST

Remember Geoff Bible, the swashbuckling Aussie who led Philip Morris until 2002? I ran into him at the U.S. Open just as rumors were flying that Altria (MO), as the the tobacco giant is now known, was about to buy UST.

Now Altria has announced its $10.3 billion deal to acquire UST, the smokeless tobacco leader that markets Copenhagen and Skoal. And Bible, who is still an Altria shareholder, offers his take: "In principle, UST is a savvy deal, especially given the slowing U.S. cigarette market. I'm too removed from the businesses these days to talk about price, but they are clever managers. They do not do dumb things, do their homework thoroughly, and have a great balance sheet. They ought be able to wring out very good revenue and overhead synergies."

Actually, the U.S. cigarette business is more than slow. It's declining--at an accelerating rate, say analysts. Perhaps this is because diehards are kicking the habit? Newsflash: Bible, for one, finally quit. So he told me courtside last Thursday as we chatted about a Fortune story that I wrote in 1997. "Geoff Bible Won't Quit" was the title, and it was about the supremely tough CEO's war with state attorneys general and his stunning decision to lead the industry into a so-called Master settlement. Since then, Philip Morris USA has paid more than $42 billion to the states. And as if to bring the restitution full circle, tobacco's onetime No. 1 defender has given it up. "I'm old," Bible told me, suggesting that it's time. He's 71, still feisty, and he appears quite fit.

Bible shared his views of a couple of other businesses that, as CEO of Philip Morris, he once oversaw.  At Kraft Foods (KFT), which Altria spun off completely in 2007, CEO Irene Rosenfeld, "is doing a terrific job," he said. She worked for Bible, detoured to PepsiCo (PEP) where she ran Frito-Lay, and returned to the world's second-largest food company in 2006. Bible is impressed by the way she is now juggling high commodity costs and delivering solid earnings, largely by persuading consumers to pay higher prices.

Bible is particularly high on SABMiller (SBMRF), where he is on the board of directors. Altria struggled profoundly when it owned Miller, long an also-ran to Anheuser-Busch's (BUD) Budweiser. But ever since Altria sold Miller to South Africa's SAB breweries in 2002, it's made out big on the 28.6% stake it retains in the combined SABMiller. With SABMiler shares trading around $20, the value of its holdings has tripled to nearly $9 billion.

SABMiller is particularly mighty in developing markets such as Latin America and Africa. It's also No. 1 in China, Bible noted, and not a market leader yet in India--but it has a growing share there. "All you need is one share point a year," he said. When he joined Philip Morris in 1968 (starting out at its European headquarters in Lausanne, Switzerland), the company had about a 1% share across Europe. Philip Morris International (PM) eventually gained close to 40% of the market. "One share point a year," Bible reiterated. Long live the long-term brand-builder.