Altria Ends Investment in Juul with Intellectual Property Swap

On the evening of March 3rd, Altria announced that it has exchanged 35% of its ownership in Juul with certain heated tobacco intellectual property owned by its company, effectively ending its investment in Juul.

It has been reported that although Juul has been dedicated to developing heated tobacco devices for many years, they have never released a non-combustible product.

According to Altria's 2022 financial report, the company has valued Juul at only $250 million, a decrease of 98% compared to when they acquired the company for $12.8 billion in December 2018.

Altria CEO Billy Gifford has stated that "we believe that exchanging our ownership of Juul for intellectual property is the right path forward for our business. Juul faces significant regulatory and legal challenges that carry a great deal of uncertainty, many of which may persist for years.

According to previous reports, Altria is planning to acquire the third largest electronic cigarette brand in the United States, NJOY, in order to enter the electronic cigarette market. Unlike Juul, some of NJOY's products have already been approved by the FDA's PMTA. (Related reading: Altria plans to acquire the third largest electronic cigarette company in the US, NJOY for $2.75 billion)

In addition, last year Altria terminated its non-compete agreement with Juul and formed a joint venture with Japan Tobacco to focus on heated tobacco products.

Billy Gifford stated that Altria will continue to explore all possibilities in order to select the best electronic cigarette brand.

Regarding Altria's departure, Juul stated that it has given them complete strategic freedom and the ability to seek other strategic opportunities and partners.

According to a report from the Wall Street Journal on January 26th, Juul is exploring potential opportunities for sale, strategic investments, licensing, or distribution, and has recently initiated preliminary talks with Phimolong International, Japan Tobacco, and Altria Group. Insider sources reveal that negotiations are in the early stages and it is not guaranteed that a sale or partnership agreement will be reached.

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Altria has withdrawn from the vaping conglomerate Juul after its shares experienced a significant decline in value.

Altria plans to acquire NJOY, the third largest e-cigarette company in the United States, for $2.75 billion.