Sources familiar with the matter say the $2.75B transaction could close as soon as this week.
RICHMOND, Va. — NJOY Holdings Inc. could be changing hands.
Altria Group Inc. is reportedly in advanced talks to buy the e-cigarette and vaping product maker for $2.75 billion, Seeking Alpha reported. The proposed deal includes an additional $500 million in earnouts if regulatory milestones are met.
Sources familiar with the matter estimate the deal for NJOY could be announced as soon as this week, although discussions could still fall apart, they added. The potential deal was first reported by The Wall Street Journal.
NJOY became one of the first major e-cigarette brands in the United States when the company launched in 2007. Last year, the Food and Drug Administration (FDA) issued some key decisions on multiple NJOY Daily e-cigarette products, including the authorization of two new tobacco products through the premarket tobacco product application (PMTA) pathway.
The acquisition of NJOY would mark a new vaping strategy for Altria after its investment in Juul Labs Inc. did not go as planned. The tobacco giant values Juul at less than $1 billion, a fraction of the $38 billion valuation the company received upon Altria's initial investment.
Legal disputes have plagued Juul in recent years, forcing the company to pay more than $1 billion to settle a number of lawsuits late last year. In June 2022, the FDA issued marketing denial orders (MDOs) for all Juul products currently on the market in the U.S. The decision came down as part of the agency's PMTA review process. The MDOs are on hold while Juul appeals the decision.
Altria recorded a $100 million loss related to its investment in the vaping company during the fourth quarter of 2022. The Juul property is expected to be fully divested if Altria finalizes a deal for NJOY, according to Seeking Alpha.
In December 2018, Altria made a $12.8-billion investment in Juul which represented a 35 percent economic interest — a stake Altria still holds today. The move included a noncompete agreement; however, in September 2022 Altria disclosed its plans to end that agreement in a filing with the U.S. Securities Exchange Commission, as Convenience Store News previously reported.
Richmond-based Altria's "Vision by 2030" is to responsibly lead the transition of adult smokers to a smoke-free future. The company is "Moving Beyond Smoking," leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices.
The company's wholly owned subsidiaries include Philip Morris USA Inc. and John Middleton Co. Its smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Co. LLC and Helix Innovations LLC.
Additionally, Altria has a majority-owned joint venture, Horizon Innovations LLC, and, through a separate agreement, has the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System and Marlboro HeatSticks through April 2024.
Equity investments include Anheuser-Busch InBev SA/NV, Cronos Group Inc. and Juul Labs Inc.
The brand portfolios of Altria's tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal and on!.