Altria Group (MO) plans to spin off its Philip Morris International tobacco unit, a move designed to give the overseas maker of Marlboros and other cigarette brands more freedom to pursue sales growth in emerging markets.

The plans, announced Wednesday, would leave Altria with a much smaller domestic tobacco business that nonetheless still ranks as the biggest in the U.S.

The spin-off would clear the international tobacco business from the legal and regulatory constraints facing its domestic counterpart, Philip Morris USA.

The company's board announced it would finalize its decision and give the exact timing of the spin-off at its board meeting on Jan. 30.

Altria Chief Executive Louis C. Camilleri will become the new CEO of Philip Morris International (PMI), once the spin-off is complete.

Michael E. Szymanczyk, the current CEO of the Philip Morris USA, will succeed Camilleri at Altria.

The proposal needs to be cleared by the Internal Revenue Service and the Securities and Exchange Commission, the company said in a statement.

A spin-off of PMI would be the latest step in a restructuring process that started in March when New York-based Altria Group Inc. spun off its majority stake in Kraft Foods Inc.

In addition to Philip Morris USA, Altria owns Philip Morris Capital Corp., a finance company, and a 29 percent stake in London-based SABMiller PLC (SBMRY), which brews Miller Lite beer.

Under a spin-off, Altria shareholders would get shares in a stand-alone Philip Morris International.

Both Philip Morris cigarette businesses plan to use the Marlboro brand in their expansion efforts.

Executives at the international cigarette company's Lausanne, Switzerland, headquarters oversee operations in more than 160 countries. Philip Morris USA's headquarters are in Richmond, Va.

Sales at Philip Morris International are more than double those at the U.S. unit, with 2006 revenues at $48.26 billion compared to Philip Morris USA's $18.47 billion.

Last year, Philip Morris International sold 831 billion cigarettes, making it the world's largest nongovernment tobacco company in terms of volume. It holds 15.4 percent of the global market and its growth is expected to continue at a healthy clip.

Morgan Stanley analyst David Adelman believes the break-up is a good long-term strategy.

"There is little evidence that the existing holding company structure added real operational value (whereas it unequivocally adds cost)," Adelman told investors in a research report Wednesday. "Perhaps most importantly, we believe that independently operated businesses will likely be more aggressive in reducing costs, more innovative in the marketplace, and under greater pressure to create value."

Adelman expects the company to do more share buybacks, cut costs and introduce new products. He said the companies should benefit from an improvement in the cigarette pricing environment.

The company also announced it would increase its regular quarterly dividend by 8.7 percent to 75 cents a share. The higher dividend will be paid Oct. 10 to shareholders of record as of Sept. 14.

Altria shares rose 37 cents to $69.44 in midday trading Wednesday.