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• How big UK groups paid no corporation tax in 2007 

Some of Britain’s biggest listed companies, including several that have threatened to redomicile abroad, paid little or no corporation tax in Britain in 2007.

Research by The Times shows that FTSE-100 companies – Cadbury, Standard Chartered and British American Tobacco, which have a combined market capitalisation of £75 billion, employed almost 11,000 UK staff and generated more than £6 billion in global profits, – paid zero corporation tax in Britain last year.

Although there is no suggestion of impropriety, the research indicates that some of Britain’s biggest and best-known companies contribute startlingly little to the Exchequer in corporation tax. Most of the companies earn the bulk of their profits overseas, meaning that they also pay most or all of their taxes outside the UK, allowing them to offset these against domestic tax liabilities. In some cases, this allows them to pay no British corporation tax at all. . . .

A spokeswoman for BAT, the twelfth-biggest company in the UK by market value and the owner of the cigarette brands Lucky Strike and Pall Mall, said that its head office operated at a loss and that 99 per cent of its profits were earned overseas. She said that the company welcomed the Treasury’s decision to examine the UK’s tax laws.

A spokesman for SABMiller, the brewing group, which paid less than £100,000 in corporation tax in Britain last year, said: “We have a very small commercial operation in the UK that employs about 70 people and is only a developing business. All other profits are taxed at source.”

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• Burnett to Tout PM's New Name 

More than a year after saying it plans to rename itself Altria, Philip Morris will launch a campaign in late January to herald the new name. The tagline: "Where people and performance make a difference." . .

Creative by Leo Burnett in Chicago is in development; it will focus on why PM is changing its name and what Altria stands for. While critics contend PM is trying to throw a cloak over its cigarette-manufacturing legacy, corporate executives say Altria is a better vehicle for building an identity as a diversified consumer-products company.

The goal of Burnett's campaign is to let consumers know that Altria is the holding company for Kraft, PM USA and PM International, and that those entities will not change their names. The spots will be unlike PM's previous corporate-image effort, which showed PM employees bringing water to flood victims and aid to war refugees. That effort backfired when activists publicized that PM spent more money--$80 million during 2001, according to CMR--on promoting its good works than on actual assistance.

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• Philip Morris Drops Beer to Concentrate Elsewhere  

After agreeing to sell the Miller Brewing Company to South African Breweries yesterday, Louis C. Camilleri, the president and chief executive of the Philip Morris Companies, told analysts that the deal would allow Philip Morris to focus on its core food and tobacco businesses.

But with Philip Morris already the owner of the country's largest tobacco company and the No. 1 food concern, Mr. Camilleri's comments fueled speculation about how and where the company plans to expand in the future. The answer, according to many people close to the company, is to seek new business outside the United States.

"It's going to be going out and looking to make acquisitions," said Marc Cohen, a tobacco and beverage industry analyst at Goldman, Sachs. "The question is what kind of returns is it going to get as it does that?" . .

Growth in the Philip Morris tobacco business is likely to come through exploring the privatization of national tobacco companies in countries where the government owns and controls the industry, analysts said.

"They played this beautifully," Robert Campagnino, a senior tobacco analyst at Prudential Securities, said. "They have a number of options. What this transaction gave them was flexibility."

A spokeswoman at Philip Morris said the company was interested in pursuing food and tobacco opportunities both in the United States and abroad.

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• Philip Morris Focus on Food, Tobacco Seen 

Philip Morris would maintain a presence in the global brewing business through its stake in SABMiller, but that could change in a few years.

"It is generally an industry that we like," Camilleri said. "If, in due time, we believe that this is a business we would like to increase our stake in, that is what we will do."

Philip Morris has agreed not to sell any shares until June 2005 and not to increase its stake until December 2004.

"They basically have a call option on the global beer business three years from now," said Prudential Securities tobacco analyst Rob Campagnino. "It just gives them a tremendous amount of flexibility."

Analysts said it is too early to know what Philip Morris would do.

"It's going to depend, I think, on what the litigation environment may look like at the time and where their stock price is," said Salomon Smith Barney's Herzog.

Analysts said that SAB's relationships with certain governments could help Philip Morris expand its international tobacco business.

Camilleri said during a morning conference call that "SAB's been very successful in China and I'm sure that over time they could probably help us both strategically and in terms of their contacts there."

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• Philip Morris to Sell Miller To SAB in $5.6 Billion Deal 

Philip Morris Cos. agreed to sell its Miller Brewing unit to South African Breweries PLC of London in a $5.6 billion transaction that would give the tobacco and food giant a sizable stake in the world's second-biggest beer company. . .

Mr. Camilleri, in his first interview since taking the reins at the end of April, said Philip Morris intends to be aggressive about deal-making. Mr. Camilleri, who as the company's chief financial officer had been instrumental in the acquisition of Nabisco Holdings Corp., said, "We will continue to pursue large acquisitions, but we will be very disciplined about it."

Another top priority, he said, is rewarding shareholders by using the company's cash for dividends and to buy back stock. The Miller deal, which he personally helped orchestrate, would further those objectives. . .

Martin Feldman, a tobacco analyst at Merrill Lynch & Co., believes the SAB deal is a harbinger of things to come. He said he expects Mr. Camilleri's tenure to be marked by "the use of well-structured deals to accelerate earnings growth and increase returns to shareholders." . .

Mr. Camilleri said he is on the prowl for companies to acquire. "My own sense is, we'll stick to food and tobacco, because we still see considerable potential in both those industries," he said, adding that most deals in the near future would be smaller, incremental additions. . .

Another potential growth engine for the company and a way to gain market share, Mr. Camilleri said, is by selling a potentially less hazardous cigarette. Mr. Camilleri has designated Michael E. Szymanczyk, now chairman of the company's domestic-tobacco operations, to shepherd to market a new smoke under development that contains lower levels of a broad range of harmful chemicals than regular cigarettes.

Mr. Camilleri said that government regulation of such products could help get them to market. That is one of the reasons, he said, that Philip Morris is lobbying Congress to give the Food and Drug Administration jurisdiction over tobacco. Mr. Camilleri already has been to Washington to meet with members of Congress and explain the company's position. "Having a regulatory framework is very important to restore our credibility in the eyes of society," he said.

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• Philip Morris sells Miller to SAB in $5.6 bln deal 

Shares in Philip Morris climbed to a 52-week high Thursday after the food and tobacco giant announced the sale of its Miller Brewing subsidiary to South African Breweries PLC in a $5.6 billion deal that will create the world's second largest brewer.

The two companies have been negotiating the Miller deal for several months. SAB has also been named as a possible buyer of Australian, Latin American and European brewers in recent months, including the U.K.'s biggest brewer Scottish & Newcastle.

"The transaction represents a new chapter in our development, taking SAB Miller to the number two position globally, and positioning it to be a major participant in the ongoing consolidation of the global beer industry," Graham Mackay, chief executive of South African Breweries, said in a statement.

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