NEW YORK (AP) _ Shares of Philip Morris Cos.' Kraft Foods division, spun off in an $8.7 billion initial public offering that was the second-biggest ever in the U.S., were up 1.7 percent by midday Wednesday in their trading debut on the New York Stock Exchange.
Kraft shares, trading under the symbol KFT, were up 54 cents at $31.54 after being priced at $31 per share Tuesday by underwriters. The offering price valued all of Kraft at about $53.8 billion.
New York-based Philip Morris will receive net proceeds of $8.4 billion from the deal, which will go toward paying down the company's debt.
The Kraft IPO ranks second behind last year's $10 billion-plus offering of stock in AT&T Wireless.
Northfield, Ill.-based Kraft Foods is the nation's biggest food company. Its brands include Oscar Mayer meats, Maxwell House coffee, Kraft and Velveeta cheese, Ritz crackers and Oreo cookies.
Philip Morris also owns the nation's biggest tobacco company and the top-selling cigarette brand, Marlboro, has been planning the Kraft offering since last summer when it announced it was buying cookie and cracker maker Nabisco for what eventually amounted to $15.2 billion.
Infact, a Boston-based corporate watchdog group opposed to the IPO, said Tuesday that the spinoff is a way for the tobacco giant to profit while retaining control of Kraft.
Philip Morris officials did not immediately respond to a telephone message seeking comment.
In the filing, Philip Morris indicated that Kraft shareholders would own about 16 percent of the 1.735 billion total Kraft shares, but Philip Morris would control 97.7 percent of the voting rights in Kraft.
The combined Kraft Foods and Nabisco operation had sales of $34.7 billion in 2000 which made it the nation's biggest food company and second worldwide only to Nestle SA of Switzerland.