Days after exiting its stake in troubled electronic cigarette maker Juul, Altria announced a $2.75 billion investment in rival electronic cigarette startup NJOY.
The Marlboro maker gets full ownership of NJOY’s e-vapor product portfolio, the Virginia company said Monday, including its pod-based e-vapor product ACE.
“We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a standalone company,” Altria CEO Billy Gifford said.
The agreement also includes an additional $500 million in cash payments contingent upon regulatory approval of some products by NJOY Holdings Inc., based in Scottsdale, Arizona.
Altria’s announcement comes just days after the company said that it was swapping its minority stake in Juul Labs for a license to some of Juul’s heated tobacco intellectual property.
Altria said that the carrying value and estimated fair value of its Juul investment was $250 million at the end of last year. The company will record the financial impact of the agreement in the first quarter of 2023 and plans to treat any amounts as a special item and exclude it from adjusted diluted earnings per share.
Gifford said Friday that the swap was the right decision for Altria.
“Juul faces significant regulatory and legal challenges and uncertainties, many of which could exist for many years,” Gifford said.
In December Juul reached settlements covering thousands of lawsuits over its e-cigarettes.
The company faced more than 8,000 lawsuits brought by individuals and families of Juul users, school districts, city governments and Native American tribes. The settlement resolved most of those cases, which had been consolidated in a California federal court pending several bellwether trials.
Financial terms of the settlement were not disclosed.
Juul rocketed to the top of the U.S. vaping market more than five years ago on the popularity of flavors like mango, mint and creme brulee. But its rise was fueled by use among teenagers, some of whom became hooked on Juul’s high-nicotine pods.
Parents, school administrators and politicians largely blamed the company for a surge in underage vaping, which now includes dozens of flavored e-cigarette brands that are the preferred choice among teens.
Amid the backlash of lawsuits and government sanctions, Juul dropped all U.S. advertising and discontinued most of its flavors in 2019.
Altria’s interest in Juul’s heated tobacco intellectual property comes a few months after it made a deal with Japan Tobacco to help its effort to bring a heat-not-burn cigarette to the U.S. market.
Altria announced in October that it was launching a new venture with Japan Tobacco to commercialize cigarette alternatives developed by both companies for U.S. smokers. The partnership’s first effort will be to win U.S. regulatory approval for Japan Tobacco’s Ploom, a small handheld device that heats tobacco without burning it.
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AP Health Writer Matthew Perrone contributed to this report from Washington, D.C.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
