logo
Plus   Neg
Share
Email

Altria Group Makes $12.8 Bln Minority Investment In JUUL Labs

Altria Group Inc. (MO) said it signed and closed a $12.8 billion investment in E-Cigarette Maker JUUL Labs Inc.

Altria's investment represents a 35% economic interest in JUUL, valuing the company at $38 billion. JUUL will remain fully independent.

As part of the service agreements, Altria will provide JUUL access to its premier tobacco products retail shelf space, allowing JUUL's tobacco and menthol-based products to appear alongside combustible cigarettes. JUUL's flavored products will continue to only be available on JUUL.com.

Altria will enable JUUL to reach adult smokers with direct communications through cigarette pack inserts and mailings to adult smokers via Altria companies' databases.

Altria will apply its logistics and distribution experience to help JUUL expand its reach and efficiency and JUUL will have the option to be supported by Altria's sales organization, which covers approximately 230,000 retail locations.

As part of this investment, JUUL signed service agreements with Altria to accelerate its mission to switch adult smokers. Proceeds will be used to return capital to employees and shareholders and create a fortified $1 billion balance sheet to expedite product development and market access.

Upon antitrust clearance, Altria's 35% non-voting shares will automatically convert to 35% voting shares, and Altria will be able to appoint directors representing one-third of JUUL's Board of Directors.

Altria will be subject to a standstill agreement under which it may not acquire additional JUUL shares above its 35% interest. Altria agrees not to sell or transfer any JUUL common shares for six years from closing.

Altria said it will participate in the e-vapor business only through JUUL as long as Altria is supplying JUUL services, which Altria is committed to doing for at least six years.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Google announced a new $600 million investment for the expansion of Mayes County data center. The tech giant had started the data center in 2007 and expanded three times already. The new investment will add 100 jobs to Pryor community, Google CEO Sundar Pichai said during the announcement. In... King Arthur Flour, Inc. voluntarily recalled certain lots of 5 lb. Unbleached All-Purpose Flour due to the potential presence of Escherichia coli bacteria (E. coli), The U.S. Food and Drug Administration (FDA) stated. The company announced it is recalling 14,218 cases of the potentially affected lots that were distributed through retailers and distributors nationwide. Burger King has launched a new Upside Down Whopper in celebration of the third season of Netflix series "Stranger Things." The hamburger chain, in partnership with Netflix, announced it will start selling an Upside Down Whopper sandwich, which is just a regular Whopper served upside down, from June...
Follow RTT