Marlboro parent Altria eyes e-cigarette maker NJOY
Altria is in advanced discussions to acquire e-cigarette startup NJOY Holdings for at least $2.75 billion, with plans to sell its stake in Juul Labs, the Wall Street Journal reports, citing people familiar.
Why it matters: The Marlboro maker is looking for its next leg of growth.
What’s happening: Under the proposed deal, NJOY could possibly receive an additional $500 million should they reach certain regulatory milestones, per the WSJ report.
- The WSJ reported in June that NJOY hired advisers to explore a sale.
Catch up fast: Altria acquired a 35% stake in vaping company Juul Labs for $12.8 billion in 2018.
- But Juul has come close to filing for bankruptcy as the e-cigarette maker became entangled with federal regulators and lawsuits that claimed the company had targeted minors.
- The fate of whether its e-cigarettes can stay on the U.S. market is also up in the air, as the company is in a quarrel with the Food and Drug Administration over that issue.
- Altria ended its noncompete with Juul last year, paving the way for the company to explore other e-cigarette contenders.
Yes, but: NJOY’s products have received clearance from federal regulators.
Threat level: The Biden administration wants to cut the amount of nicotine in cigarettes sold in the U.S., further spurring a rush for tobacco companies to find new ways to grow.
- Plus, most Americans are supportive of a tobacco ban, according to a CDC study.
What’s next: The deal could be announced as soon as next week, according to WSJ. But there’s still a possibility that the talks fall through.
Representatives at Altria and NJOY couldn’t immediately be reached for comment.