Altria Group, the manufacturer of the popular cigarette brand Marlboro, has acquired a significant stake in NJOY, an e-cigarette company, for a sum of approximately $2.75 billion. As part of the deal, Altria Group will divest its ownership in Juul Labs, a separate e-cigarette and vaping company.
Altria Group Inc, headquartered in Henrico County, Virginia, is a global leader in tobacco and cigarette production and marketing. The company is publicly traded on the New York Stock Exchange and generated revenue of $21.11 billion in 2021.
Altria’s recent acquisition of NJOY is significant, particularly since it comes five years after the company spent approximately $13 billion to acquire a 35% stake in Juul Labs, a Washington DC-based e-cigarette manufacturer founded by Adam Bowen and James Monsees in 2015.
NJOY is an e-cigarette company with its headquarters in Scottsdale, Arizona. It was founded in 2006 by Craig Weiss and Mark Weiss, and has since grown to become a significant player in the industry. The company’s major products include rechargeable and disposable e-cigarettes, as well as vaping devices. Ryan Nivakoff is currently serving as Chief Executive Officer of NJOY LLC.
When Altria Group purchased a stake in Juul Labs in a multi-billion dollar deal, many analysts warned that the investment was not a safe or wise decision. As experts predicted, Juul faced numerous health, environmental, and legal issues, leading to a significant decline in its e-cigarette market share.
In the end, Altria’s stake in Juul was only valued at $250 million by the end of 2022, prompting the company to divest its ownership. In exchange for its stake, Altria received a non-exclusive global license to Juul’s tobacco intellectual property rights.
In an official statement, Juul Labs announced that it is no longer bound by the terms of its previous agreements and is now able to pursue other strategic opportunities and partnerships. The company is now free to explore various options to enhance the value of its business, while simultaneously advancing its product technology and innovation pipeline.
Meanwhile Altria CEO Billy Gifford stated that exchanging the company’s ownership in Juul for intellectual property rights is the most suitable approach for the business. He noted that Juul is facing significant legal and regulatory obstacles that could persist for many years, making it a challenging investment. Gifford added that Altria is exploring various options to remain competitive in the e-vapor category.