In order to strengthen the portfolio of non-tobacco products, Altria Group announced on Monday that it would buy e-cigarette startup NJOY for $2.75 billion.
Altria, the maker of Marlboro cigarettes, will have full global ownership of NJOY’s portfolio of e-vape products, including NJOY ACE, the only e-vape product with FDA market approvals.
“We believe we can responsibly accelerate the adoption of adult vapers in the U.S. and compete with NJOY ACE in a way that NJOY as a stand-alone company would not be able to do,” said Altria CEO Billy Gifford.
The announcement comes shortly after Altria exited its stake in e-cigarette maker Juul Labs. Altria bought a stake in Juul Labs in 2018 for an estimated $12.8 billion, but the deal quickly fell apart amid scrutiny from federal regulators and thousands of lawsuits filed against Juul targeting minors. Altria’s Juul stake was recently valued at $250 million, according to Reuters.
Juul came close to filing for bankruptcy in November and has been under scrutiny by the Food and Drug Administration, which briefly pulled its products from shelves nationwide last year. In September, Altria terminated its non-compete agreement with Juul.
The Altria-NJOY deal includes $500 million in cash payments contingent on certain regulatory outcomes with NJOY products.
NJOY has six products that have received full marketing approval from the US Food and Drug Administration. It is one of the few vaping companies whose products have received approval from federal regulators.
“We believe the strengths of our commercial resources can benefit adult tobacco consumers and enhance competition,” added Gifford.
