As long as companies in the "smokes" business are not being sued by dead people who used their products, it is a hell of a business. Operating margins can run above 20% and cash flow is stupendous.

All of that makes Altria’s (MO) decision to delay its buyout of UST (UST) more troubling. The credit markets have been mauled to the extent that the banks helping finance the deal have suggested it be delayed until early next year. The MO press release on the acquisition said "While Altria currently has fully committed financing to complete the transaction, Altria’s lenders advised that it would be preferable to close the transaction in 2009."

That is double-talk for saying the banks wanted junk-bond rates to consummate the marriage of the two companies, an acknowledgment of how significantly access to credit has fallen in the last two weeks.

The message in a bottle is that no deal, no matter how creditworthy the firms involved may be, is going to get done over the next quarter. If matters do not improve, Wall St. can assume Altria will pay a break-up fee of $300 million and walk away from UST sometime after the first of the year.

The markets should have seen the announcement coming. The 10% coupon that GE (GE) and Goldman Sachs (GS) had to pay Warren Buffett for money was remarkable evidence of how expensive cash is for even iconic American firms.

M&A died last week and the Altria announcement buried it.

Douglas A. McIntyre

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