Altria's Investment in Juul Valued at $450 Million

Aug.02.2022
Altria's Investment in Juul Valued at $450 Million
Altria's 35% stake in Juul, the leading e-cigarette manufacturer, has decreased in value by 95% due to increasing safety concerns.

Juul became the global leader in electronic cigarette manufacturing in 2018, with its products gaining widespread popularity. Virginia-based tobacco brand Altria did not want to miss out on the opportunity presented by the rapidly growing e-cigarette market and acquired a 35% stake in Juul for 12.8% of the price. At the time, Altria firmly believed that e-cigarettes represented the future of tobacco use worldwide, and Juul was leading the way towards this promising future.


However, the reality is quite different. Recently, reports claiming that electronic cigarettes are just as dangerous as traditional smoking have dampened enthusiasm for the market, sending shockwaves throughout the entire industry. Even Juul, once the world's most valuable e-cigarette company, has seen its valuation drop following concerns raised by the FDA about the safety of its products, despite a recent investment from Altria.


Tobacco company Altria's investment in Juul is now valued at $450 million, less than 5% of the e-cigarette maker's 2018 valuation. Earlier this year, Altria lowered its valuation of Juul to $1.6 billion as the US Food and Drug Administration began reviewing Juul's products. In its Q2 earnings report, Altria further reduced the valuation by $1.2 billion, putting the new value at $450 million. Despite the drastic reduction, Altria says it has no plans to work with Juul and will honor its original agreement not to launch any new e-cigarette products or invest in other e-cigarette companies. "We made the decision not to make any different decisions," said Altria CEO Billy Gifford. "We believe the right decision at this point in time is to maintain noncompetition.


The rapid decline in Juul's valuation is due to the FDA's decision last month to ban Juul e-cigarettes, as the company failed to provide key information about its nicotine formula. This surprised many as the FDA has approved many similar products. While Juul received criticism from a federal court to continue selling its products, the FDA has re-examined the company's application and frozen its ban. This means that the future of Juul's products remains uncertain in the foreseeable future.


The FDA's decision stems from recent studies that indicate e-cigarettes are harmful to users and pressure from advocacy groups who believe these products are just as bad as traditional tobacco products. Therefore, the FDA is working to eliminate products that do not help smokers quit. Juul's various flavors and brightly colored packaging are attractive to non-smokers. Aside from its valuation, Juul's current issues have also led to a nearly 60% decrease in Altria's earnings to 49 cents per share. This has caused a 6% decrease in quarterly revenue to around $6.5 billion. Altria is the largest cigarette manufacturer in the US and, as smoking rates decline, the company is fighting hard in the Juul and future e-cigarette market.


This article is compiled from third-party information and is only for industry exchange and learning.


This article does not represent the views of 2FIRSTS and 2FIRSTS cannot verify the truthfulness or accuracy of the content. The translation of this article is intended for industry-related discussions and research purposes only.


Due to limitations in translation capabilities, the translated article may not express the original meaning accurately. Please refer to the original article for accuracy.


2FIRSTS aligns completely with the Chinese government's views and positions on all domestic, Hong Kong, Macau, Taiwan, and international matters.


The compilation of information belongs to the original media outlet and author. If there is any infringement, please contact us for deletion.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Imperial Brands Acquires Helwit Owner Yoik Group for SEK 515 Million, More Than Doubling Swedish Nicotine Pouch Share
Imperial Brands Acquires Helwit Owner Yoik Group for SEK 515 Million, More Than Doubling Swedish Nicotine Pouch Share
Imperial Brands has agreed to acquire 100% of Swedish modern oral nicotine company Yoik Group AB for an initial SEK515 million, equivalent to about US$53.9 million, plus a deferred payment linked to performance over the next two years. Yoik owns nicotine pouch brand Helwit, which held about 3.4% of Sweden’s modern oral nicotine market over the past 12 months. Imperial says the acquisition will more than double its existing share of the Swedish market. Helwit is also sold elsewhere in the Nordics, through European online channels and in selected UK retail outlets.
Sep.08
FRE and ALP Push Modern Oral to 48% of Q2 Sales as Turning Point Brands Changes CEO and Lowers Profit-Guidance Ceiling
FRE and ALP Push Modern Oral to 48% of Q2 Sales as Turning Point Brands Changes CEO and Lowers Profit-Guidance Ceiling
Turning Point Brands said Executive Chairman David E. Glazek will become CEO on October 1, replacing Graham Purdy, who is stepping down for personal reasons. The company narrowed its 2026 adjusted EBITDA outlook to $70 million-$80 million from $70 million-$90 million while maintaining Modern Oral gross sales guidance of $330 million-$350 million and net sales guidance of $260 million-$270 million. In the second quarter, Modern Oral net sales rose 128% to $68.4 million and accounted for 48% of company-wide net sales. Adjusted EBITDA fell 50% year over year. TPB shares closed about 10% lower on September 21.
Market
Sep.22 by 2Firsts Perspectives
Imperial Brands Sees Double-Digit NGP Growth as Sixth Year of Tobacco Revenue Gains Backs £1.5 Billion Buyback
Imperial Brands Sees Double-Digit NGP Growth as Sixth Year of Tobacco Revenue Gains Backs £1.5 Billion Buyback
Imperial Brands reaffirmed its FY26 guidance in its October 8 pre-close trading update, forecasting double-digit net revenue growth in next-generation products and share gains across heated tobacco, vape and modern oral. Tobacco net revenue is expected to grow at a low-single-digit rate, marking a sixth consecutive year of growth. The company has completed its £1.45 billion FY26 share repurchase and announced a £1.5 billion buyback for FY27. Group adjusted operating profit is expected to increase 3% to 5%, while free cash flow is forecast to exceed £2.2 billion.
Oct.09
China Tobacco Yunnan files patent for cellulose-free nicotine pouch scaffold to replace microcrystalline cellulose
China Tobacco Yunnan files patent for cellulose-free nicotine pouch scaffold to replace microcrystalline cellulose
China Tobacco Yunnan Industrial Co., Ltd. has filed a patent application for a cellulose-free scaffold material for nicotine pouches, proposing a combination of bioceramic material, polydextrose and sugar alcohols to replace conventional microcrystalline cellulose and cellulose derivatives. The filing aims to address issues including powdery mouthfeel, residue and limited release control, while also reducing reliance on existing cellulose-based patent portfolios. In patent examples, one fast-release formulation reached a nicotine release rate of 50% at 10 minutes and more than 90% at 20 minutes.
Sep.02
JTI Proposes 25-Cent Irish Cigarette Tax Increase, Says It Could Raise €45 Million
JTI Proposes 25-Cent Irish Cigarette Tax Increase, Says It Could Raise €45 Million
Japan Tobacco International's Irish business has proposed a €0.25 tax increase on a pack of 20 cigarettes in its pre-Budget 2027 submission, below the €0.50-or-more increases typically imposed in recent Irish budgets. JTI says the proposal could generate around €45 million in additional Exchequer revenue while limiting further movement toward illicit and non-Irish-tax-paid tobacco. Revenue's existing estimate for a comparable €0.25 increase, including pro-rata rises on other tobacco products, is about €18 million for a full year.
JTI
Sep.18 by 2Firsts Perspectives
PMI Expands Its Second Global and First Asian Business Services Hub in the Philippines, Serving 160 Markets and Scaling Up AI Capabilities
PMI Expands Its Second Global and First Asian Business Services Hub in the Philippines, Serving 160 Markets and Scaling Up AI Capabilities
Philip Morris International's PMI Business Solutions Philippines has expanded its global business services hub in Makati and plans to add more than 80 positions. Established in 2021 primarily to provide finance and IT support to about 20 markets, the center now employs 519 professionals delivering roughly 600 services across 160 markets. Its functions now span finance, human resources, IT, commercial operations, data analytics, supply chain and project management. PMI says the hub's next phase will focus on AI-enabled and higher-value work. The company did not disclose the size or investment cost of the expansion.
Sep.24