Marlboro maker Altria to buy NJOY

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In an effort to strengthen its portfolio of smoke-free products, Altria Group on Monday said it will buy e-cigarette startup NJOY for $2.75 billion.

Altria, which makes Marlboro cigarettes, will have full global ownership of NJOY’s e-vapor product portfolio, which includes NJOY ACE, the only pod-based e-vapor product with market authorizations from the FDA.

“We believe we can accelerate the adoption of NJOY ACE’s competing adult vapes by American adult smokers and adults, which NJOY cannot do as a standalone company,” said Billy Gifford, Altria CEO.

The announcement came shortly after Altria exited its stake in electronic cigarette maker Juul Labs. Altria acquired a stake in Juul Labs, which was valued at $12.8 billion in 2018, but the deal quickly soured amid scrutiny from federal regulators and thousands of lawsuits that claimed Juul targeted minors. Altria’s Juul stake was recently valued at $250 million, according to Reuters.

Juul came close to filing for bankruptcy in November, and its products are under scrutiny from the Food and Drug Administration, which briefly shut them down nationwide last year. In September, Altria ended its non-compete agreement with Juul.

The Altria-NJOY deal includes $500 million in cash payments contingent upon certain regulatory outcomes with NJOY products.

NJOY has six products that have received full approval for sale from the US Food and Drug Administration. It is one of the few vaping companies whose products are approved by federal regulators.

“We believe the strength of our commercial resources can benefit adult tobacco consumers and expand competition,” Gifford said.

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