E-Cigarette Maker Juul Eyes Strategic Alternatives With Philip Morris, Japan Tobacco, Altria

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  • Lately, e-cigarette maker Juul Labs Inc had separate discussions with Philip Morris International Inc PMJapan Tobacco JAPAF JAPAY, and Altria Group, Inc MO over a potential sale, investment or partnership.
  • Altria, which owns a 35% stake in Juul, valued the vaping company at $1 billion in October, the Wall Street Journal reports.
  • Juul, which represents 27% of e-cigarettes sold in U.S. stores tracked by Nielsen, was on the verge of bankruptcy in 2022 amid a regulatory dispute over its existence in the U.S. market.
  • The U.S. pursued a federal ban on menthol cigarettes. California has already banned menthols. 
  • The U.S. proceeded to eliminate nearly all nicotine from cigarettes.
  • As federal regulators revamped the industry, big tobacco companies competed to grab pieces of the U.S. e-cigarette market.
  • The FDA in June ordered Juul to halt its U.S. sales which neared the settlement of lawsuits accusing it of marketing its products to children and teens.
  • Juul reached talks with Altria last fall on a potential deal to sell Juul’s international business or license its U.S. intellectual property. Still, those talks fell apart in September as Juul prepared for a possible bankruptcy.
  • Last September, Altria shared plans to end the agreement with Juul, which helped the latter prepare for its sale.
  • In January, Juul CEO K.C. Crosthwaite and other executives traveled to Switzerland, where Japan Tobacco and Philip Morris are based, to discuss Juul’s newly expanded option.
  • Juul has also resumed discussions with Altria. Altria cannot buy Juul outright over antitrust concerns.
  • If the FDA ultimately halts Juul’s sales, Juul could seek U.S. authorization for a newer version of its vaporizer released in Canada and the U.K. 
  • Price Action: MO shares traded higher by 0.11% at $44.98 in the premarket on the last check Thursday.
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