Altria Takes 35% Stake in E-Cigarette Maker Juul
December 20 2018 - 8:06AM
Dow Jones News
By Allison Prang
Altria Group Inc. said Thursday it invested $12.8 billion in
cash in Juul Labs Inc., giving it a 35% stake in the e-cigarette
firm and helping add to its portfolio outside of regular
cigarettes.
The investment values Juul at about $38 billion, pushing the
private company's valuation past those of other startups like
Pinterest and Elon Musk's SpaceX. Altria said Juul will stay
completely independent.
"We understand the controversy and skepticism that comes with an
affiliation and partnership with the largest tobacco company in the
U.S.," Juul Chief Executive Kevin Burns said in a written statement
Thursday. "We were skeptical as well. But over the course of the
last several months we were convinced by actions, not words, that
in fact this partnership could help accelerate our success
switching adult smokers."
The Wall Street Journal reported Wednesday that Altria was
getting close to a deal with Juul.
As part of its investment Altria, the maker of Marlboro
cigarettes, said it will give Juul shelf space by its own products
and let the e-cigarette company market to Altria's customers using
its databases. Juul can also utilize Altria's retail footprint of
about 230,000 stores.
When antitrust regulators approve the deal, Altria can appoint
one-third of the directors on Juul's board, Altria said.
Altria is also limited from expanding its 35% stake in Juul as
part of a standstill agreement, it said. For six years from the
deal's close, Altria also can't transfer or sell Juul shares.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
December 20, 2018 07:51 ET (12:51 GMT)
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