Altria board approves $13 billion investment in e-cigarette company Juul
Altria's board of directors has approved its $12.8 billion investment in leading e-cigarette manufacturer Juul, with a formal announcement planned for Thursday before market open, people familiar with the matter told CNBC. Juul's board is meeting to consider the deal.
Tobacco giant Altria will invest $12.8 billion for a 35 percent stake in Juul, which values the e-cigarette company at $38 billion, the people said. The deal combines the maker of the best-selling cigarette with the best-selling e-cigarette and comes as both companies are under pressure.
The deal marks a turning point for Juul. The company has positioned itself as anti-tobacco, with a mission to help to wean adults off combustible cigarettes, which are responsible for killing about half a million Americans every year. With this deal, though, it will be partly owned by one of the world's biggest tobacco giants.
As such, Juul stipulated a number of conditions to help ensure the Altria deal furthers its goals. As part of the agreement, Altria would add Juul coupons to Marlboro and other cigarette packs and give Juul some of its prime shelf space, the people familiar said.
Also at NYT, Reuters, and The Verge.
See also: Marlboro maker Altria nears deal to take 35 percent stake in leading e-cigarette company Juul, sources say
$1.3 million: the average bonus Juul employees get after a deal with a cigarette maker
[$38 billion] makes Juul Labs Inc. more valuable than Airbnb and Elon Musk's SpaceX, according to Bloomberg News.
Previously: E-Cig Maker Juul Valued at $15-16 Billion
FDA Raided E-Cigarette Maker Juul to Look for Evidence That the Company Targets Minors
Juul Boosts Lobbying Spending as Potential E-Cigarette Regulations Loom
Marlboro Owner Invests $1.8 Billion in Cannabis Company
(Score: 2) by JoeMerchant on Friday December 21 2018, @09:46PM (2 children)
I think the banks have it backwards...
https://www.marketwatch.com/story/altrias-credit-cut-2-notches-at-sp-as-a-result-of-juul-cronos-investments-2018-12-20 [marketwatch.com]
🌻🌻 [google.com]
(Score: 2) by takyon on Friday December 21 2018, @10:03PM (1 child)
Cannabis is arguably the less risky investment. The feds could try to extract a multibillion dollar settlement out of Juul for marketing to kids and whatnot.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by JoeMerchant on Saturday December 22 2018, @01:49AM
Actually, the banks' point is that Altria has leveraged themselves excessively to make these purchases and they're not likely to un-leverage themselves in the next 6-12 months, and that's a fair point. However, in the long run, even with a $2B (more likely $20M) settlement from Juul for marketing to kids, Altria stands to profit hugely from the changing times:
https://www.citizen-times.com/story/news/local/2018/12/21/trump-signs-farm-bill-making-cbd-and-hemp-federally-legal/2385540002/ [citizen-times.com]
🌻🌻 [google.com]