Altria Group (MO) Monday said it has agreed to buy e-cigarette startup NJOY for $2.75 billion, as the company aims to improve its portfolio of smoke-free products.
Altria will have full global ownership of NJOY's e-vapor product portfolio, including NJOY ACE, the only pod-based e-vapor product with market authorizations from the FDA.
The transaction terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.
"We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a standalone company," said Billy Gifford, Altria's Chief Executive Officer. "We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY's talented employees to Altria at closing."
"As a result of this Transaction, Altria's enhanced smoke-free portfolio will include full global ownership of products and technologies across the three largest smoke-free categories and a joint venture with JT Group for the U.S. commercialization of heated tobacco stick products."
The announcement comes soon after Altria exited its stake in electronic cigarette maker Juul Labs. Altria acquired a stake in Juul Labs that was valued at $12.8 billion in 2018, but the company exited after scrutiny from federal regulators and thousands of lawsuits that claimed the Juul had targeted minors.
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