E-cigarette maker Juul Labs on Thursday received a $12.8 billion investment from tobacco giant Altria, the maker of Marlboro cigarettes. File Photo by sarahjohnson1/Pixabay/UPI
Dec. 20 (UPI) -- Tobacco giant Altria is buying a $12.8 billion stake in e-cigarette maker Juul Labs, the companies announced Thursday.
As part of the agreement, Altria will become a minority investor in Juul and will not acquire more than a 35 percent stake. Juul will maintain its autonomy as a separate company.
Juul e-cigarettes will get top-shelf space alongside Altria-made Marlboro brand cigarettes, and Altria will also help with distribution and logistics for Juul products.
Juul Labs CEO Kevin Burns said he was skeptical of the largest U.S. cigarette maker partnering with a company that aims to switch smokers to "vaping."
"But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers," Burns said. "We understand the doubt. We doubted as well. We made it very clear that any investment would need to meet demanding and specific criteria to ensure that they are committed to our mission."
"We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes by investing $12.8 billion in Juul, a world leader in switching adult smokers," Altria said in a statement. "We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction."
Juul has attracted significant criticism in recent months, from some who say its fruity flavors and sleek design has drawn underage users. The U.S. Surgeon General issued a public warning Wednesday about the health risks of vaping. E-cigarettes still contain nicotine, the U.S. Centers for Disease Control said, which can be harmful to the brain development of young people.
"We need to protect our kids from tobacco products, including all shapes and sizes of e-cigarettes," Surgeon General Vice Admiral Jerome M. Adams said. "Everyone can play an important role in protecting our nation's young people from the risks of e-cigarettes."
The Food and Drug Administration estimates 37 percent of high school seniors vape. Nearly 25 percent of Juul's Twitter followers are younger than 18.