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Illustration:Aïda Amer/Axios

Vaping giant Juul is facing employee resistance to a proposed investment by Altria Group, the maker of Marlboro cigarettes, according to internal messages obtained by Axios.

Why it matters: The deal could value Juul at around $30 billion, and be a big first step toward cigarette sector consolidation.

Details: Axios has learned that Altria first approached Juul near the beginning of 2018, offering to invest in the company or even buy it outright for around $5 billion.

  • Juul rebuffed the initial interest, but Altria remained persistent, regularly coming back with higher price points.
  • In July, Juul raised $1.2 billion at a valuation of around $15 billion, in a round led by Fidelity Investments. Axios reported that revenue had jumped from $60 million in 2016 to $245 million in 2017, with expectations of getting close to $1 billion this year.
  • In September, the Food and Drug Administration said it was considering new regulations on the sale of e-cigarettes, due to their use by teenagers. Juul at the time was quietly in talks to raise a new funding round at a valuation of at least $20 billion — most likely from hedge funds and similar types of investors — but put those discussions on hold until the FDA situation was resolved.
  • The FDA earlier this month banned most retail sales of "flavored" e-cigarette pods, including Juul's most popular product (mango), and also required increased online age verification.
  • Discussions with Altria remain fluid, and may not result in a transaction. The $30 billion valuation is said to be a "ballpark" figure.

Juul might have appeared to be less valuable after the FDA rules, but a source says that the FDA's action created less regulatory risk going forward without affecting basic product design or margins. Thus the price premium being discussed with Altria.

The opposition: Many Juul employees were surprised to learn about the talks with Altria, which was first reported on Wednesday by The Wall Street Journal, according to screenshots of internal Slack messages that were obtained by Axios.

  • Some employees initially doubted the veracity of the news reports, with one suggesting it was a phony leak concocted by Altria to boost its stock price.
  • Among those who believed the reports, concerns mostly revolved about how Juul would be making a "deal with the devil." It would be antithetical to Juul's mission of helping smokers quit combustible cigarettes, they argued, thus making it more difficult to retain existing employees and recruit new ones.

Juul CEO Kevin Burns sent a company-wide email Wednesday confirming "significant interest" from prospective investors, but declining to comment on what he referred to as media "speculation" over Altria.

A Juul spokesman declined comment.

Go deeper

Scoop: Gina Haspel threatened to resign over plan to install Kash Patel as CIA deputy

CIA Director Gina Haspel. Photo: Win McNamee/Getty Images

CIA Director Gina Haspel threatened to resign in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelation stunned national security officials and almost blew up the leadership of the world's most powerful spy agency. Only a series of coincidences — and last minute interventions from Vice President Mike Pence and White House counsel Pat Cipollone — stopped it.

Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

John Weaver, Lincoln Project co-founder, acknowledges “inappropriate” messages

John Weaver aboard John McCain's campaign plane in February 2000. Photo: Robert Schmidt/AFP via Getty Images)

John Weaver, a veteran Republican operative who co-founded the Lincoln Project, declared in a statement to Axios on Friday that he sent “inappropriate,” sexually charged messages to multiple men.

  • “To the men I made uncomfortable through my messages that I viewed as consensual mutual conversations at the time: I am truly sorry. They were inappropriate and it was because of my failings that this discomfort was brought on you,” Weaver said.
  • “The truth is that I'm gay,” he added. “And that I have a wife and two kids who I love. My inability to reconcile those two truths has led to this agonizing place.”