Multinational tobacco firm Altria has announced it has paid $12.8 billion to acquire a 35% stake in e-cigarette company Juul.
Announcing the purchase, Altria said the move would allow Juul the opportunity to reach adult smokers through prime retail shelf space, inserts in cigarette packs and an adult smoker database. It added that the service agreements would accelerate Juul’s mission to switch adult smokers to e-vapour products.
Commenting on the deal, Altria chief executive Howard Willard said: “We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes […]. We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction. Through JUUL, we are making the biggest investment in our history toward that goal”.
Juul chief executive officer Kevin Burns added: “Altria’s investment sends a very clear message that JUUL’s technology has given us a truly historic opportunity to improve the lives of the world’s one billion adult cigarette smokers. This investment and the service agreements will accelerate our mission to increase the number of adult smokers who switch from combustible cigarettes to JUUL devices”.
The acquisition of a stake in Juul is Altria’s latest announced diversification in the space of two weeks. Early in December it announced a move into the cannabis sector with the acqusition of a 45% stake in Cronos Group.