Juul Exploring Options; Sale & Investment Are on the Table
NATIONAL REPORT —Juul Labs Inc. is mulling several opportunities with three major tobacco companies.
According to reports, the vapor company is in talks with Philip Morris International Inc., Japan Tobacco Group and Altria Group Inc. concerning a potential sale, strategic investment, licensing or distribution deal, according to Reuters.
The talks were originally reported by The Wall Street Journal, which cited people familiar with the matter. The separate discussions may not result in a deal, the sources added.
Juul and Richmond, Va.-based Altria have a connection dating back to late 2018. In December of that year, Altria made a $12.8-billion investment in Juul which represented a 35 percent economic interest in Juul — 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.
Reports of Juul's talks with the three tobacco companies follows a bumpy year for the company. In June, the Food and Drug Administration (FDA) issued marketing denial orders (MDOs) for all its products currently on the market in the United States. The decision came down as part of the agency's premarket tobacco product application (PMTA) review process.
Juul immediately filed for, and was granted, an emergency motion for temporary administrative stay in the United States Court of Appeal for the District of Columbia Circuit as it prepares to appeal the FDA's ruling. The court's move allowed Juul's products to remain on the market and the FDA subsequently put its MDOs for the PMTAs on hold.
In late summer, Juul reached a $438.5 million agreement with 34 states and territories to settle a two-year investigation into the vapor company's marketing and sales practices. Three months later the company settled with plaintiffs in federal multidistrict litigation and related Juul Labs Product Cases that have been consolidated in the United States District Court for the Northern District of California. The resolution covers more than 5,000 cases brought by roughly 10,000 plaintiffs against Juul Labs and its officers and directors.