Altria Group, Inc. has reached an agreement to purchase e-cigarette startup company NJOY Holdings for $2.75 billion. File photo by sarahjohnson1/Pixabay
March 6 (UPI) -- Altria Group Inc. has reached an agreement to purchase e-cigarette startup company NJOY Holdings for $2.75 billion.
Marlboro's parent company announced the acquisition of NJOY Monday, saying it will enhance its "smoke-free portfolio."
"We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a standalone company," Billy Gifford, Altria's CEO, said in a statement.
"We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY's talented employees to Altria at closing."
The purchase follows Altria Group dropping its stake in another e-cigarette company, Juul. Altria's defunct Juul deal lost billions of dollars in value, Bloomberg reported. The original buy-in from Altria was valued at about $12.8 billion and has fallen to about $250 million.
"The return of Altria's equity stake and termination of underlying agreements affords us full strategic freedom -- we are no longer limited by the terms of those agreements to pursue other strategic opportunities and partnerships," Juul Labs said in a statement on Friday.
According to Altria, there are about 9.5 million adult tobacco users exclusively use e-vapor products. E-vapor products did about $7.5 billion in domestic sales in 2022.
The Centers for Disease Control and Prevention reported that research is ongoing into the long-term effects of e-cigarette use, but noted that defective batteries have caused devices to explode and inflict injury on users. The agency also said flavored vaping products are marketed toward young people, though Altria cites a study from the University of Michigan that suggests youth nicotine vaping has reduced by about 24% from 2019 to 2022.