Altria acquires NJOY
Altria Group has reached an agreement to acquire NJOY Holdings for about $2.75 billion in cash. The deal terms include an additional $500 million cash payment depending on regulatory outcomes for certain NJOY products. Altria CEO Billy Gifford said in a s
Altria Group has reached an agreement to acquire NJOY Holdings for approximately $2.75 billion in cash. The terms of the deal include an additional $500 million cash payment, contingent on the regulatory outcomes of certain NJOY products.
Altria's CEO Billy Gifford stated in a statement: "We believe we can accelerate the confidence of adult smokers and competitive adult vaping users in NJOY Ace, which NJOY as an independent company cannot achieve." He added, "We believe our commercial resource advantages can benefit adult tobacco consumers and expand competition. We are also pleased to welcome NJOY's talented employees to Altria upon closing."
"As a result of this transaction, Altria's enhanced smoke-free product portfolio will include full global ownership of products and technologies across three major smoke-free categories, as well as a joint venture with JT Group to commercialize heated tobacco stick products in the U.S."
"We are excited to add NJOY's electronic vapor intellectual property as a new platform, and we believe we can help more adult smokers transition to smoke-free alternatives," said Altria's new Chief Innovation and Product Officer Olivier Houpert.
Altria will hold a conference call on March 6, 2023, at 9 AM Eastern Time. A live webcast will be available. After the event, a replay and transcript will be available on the same website.
According to Altria, by 2022, the U.S. e-cigarette category included nearly 14 million adult tobacco consumers, including 9.5 million exclusive adult e-cigarette users. The segment generated approximately $7 billion in retail sales in the U.S., accounting for about 15% of estimated equivalent total U.S. tobacco sales and over 50% of estimated equivalent smoke-free tobacco sales.
So far, the U.S. Food and Drug Administration has approved 23 vapor products and devices for market sale. In 2022, NJOY received marketing authorization orders for the NJOY Ace device and several tobacco-flavored pods. The regulatory agency is still reviewing premarket tobacco product applications for several NJOY menthol-flavored vapor products.
Altria stated that this transaction has multiple funding sources, including cash from the $2.7 billion agreement reached last year with Philip Morris International regarding the IQOS heated tobacco system.
Prior to the NJOY deal, Altria announced it would exchange its entire minority investment in the struggling Juul Labs for a non-exclusive global license for certain heated tobacco intellectual property from Juul.
