Altria buys US vape brand NJOY after Juul exit
March 7, 2023
A woman poses with a cigarette in front of Altria logo in this illustration taken July 26, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US tobacco giant Altria has announced that they have entered into a definitive agreement to acquire leading vape firm NJOY Holdings.
Altria will pay approximately $2.75 billion (£2.30bn) at the closing of the deal, and the terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.
The move follows Altria exchanging its entire minority economic investment in NJOY rival Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.
The deal will give Altria full global ownership of NJOY’s vape portfolio, including NJOY ACE, currently the only pod-based e-vapor product with market authorisations from the US Food and Drug Administration (FDA).
“We believe we can responsibly accelerate US adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a standalone company. We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY’s talented employees to Altria at closing,” said Billy Gifford, Altria chief executive.
“As a result of this transaction, Altria’s enhanced smoke-free portfolio will include full global ownership of products and technologies across the three largest smoke-free categories and a joint venture with JT Group for the US commercialization of heated tobacco stick products,” he added.
Last October, Altria has announced a strategic partnership with JT Group, launching a joint venture with Japan Tobacco International – a subsidiary of JT which sells the heated tobacco product Ploom – for the US marketing and commercialisation of heated tobacco stick products and its expanded pipeline of wholly owned products.
Altria in late 2018 invested about $13bn in Juul, a stake that has been written down several times as Juul has faced various government crackdowns. As of December 31, 2022, the carrying value and estimated fair value of Altria’s Juul investment was $250m.
The FDA last year sought to pull all of Juul Labs’ products off the market, though that decision is on hold while the company challenges it.
