Altria to Buy Vaping Startup NJOY For At Least $2.75 Billion
March 06 2023 - 08:13AM
Dow Jones News
By Robb M. Stewart
Altria Group Inc. has struck a deal to buy startup NJOY Holdings
Inc. for at least $2.75 billion, a big step forward for the
Marlboro maker's efforts to shift into e-cigarettes as U.S. smoking
of traditional cigarettes has declined.
The deal comes after Altria last week said it would exchange its
entire minority investment in embattled e-cigarette maker Juul Labs
Inc. for a non-exclusive global license to certain of Juul's heated
tobacco intellectual property
The tobacco giant said that with NJOY it will gain full global
access to the company's e-vapor product portfolio, including the
only pod-based cape product with market authorization from the Food
and Drug Administration.
The purchase price will be payable in cash when the deal closes
and includes an additional $500 million in cash payments contingent
on regulatory outcomes with respect to certain NJOY products,
Altria said.
The Wall Street Journal reported late last month that Altria was
in advanced talks to buy NJOY and to sell its stake in Juul, which
came close to filing for bankruptcy last year after becoming
embroiled in a dispute with federal regulators and lawsuits
alleging it had targeted minors, which Juul has denied.
The majority of vape products on the market haven't received a
marketing granted order from the FDA, though so long as the
products have a pre-market tobacco product application pending, the
regulator has allowed them to remain on the market subject to its
enforcement discretion. NJOY has received marketing granted orders
for six products, Altria said.
The company said it expects the deal will boost cash flows
within two years and strengthen adjusted per-share earnings within
three years of closing.
Altria affirmed its forecast for 2023 full-year adjusted
earnings of $4.98 to $5.13 a share, up from $4.84 recorded in
2022.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
March 06, 2023 07:58 ET (12:58 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Altria (NYSE:MO)
Historical Stock Chart
From May 2023 to Jun 2023
Altria (NYSE:MO)
Historical Stock Chart
From Jun 2022 to Jun 2023
