Marlboro maker Altria to buy NJOY

In a bid to strengthen its portfolio of smoke-free products, Altria Group said Monday it would buy e-cigarette startup NJOY for $2.75 billion.

Altria, which makes Marlboro cigarettes, will have full global ownership of NJOY’s e-vapor product portfolio, including NJOY ACE, the only pod-based e-vapor product with market authorizations from the FDA.

“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,” Altria CEO Billy Gifford said.

The announcement comes soon after Altria exited its stake in electronic cigarette maker Juul Labs. Altria acquired a stake in Juul Labs that was valued at $12.8 billion in 2018, but the deal quickly soured amid scrutiny from federal regulators and thousands of lawsuits that claimed the Juul had targeted minors. Altria’s Juul stake was recently valued at $250 million, according to Reuters.

Juul came close to filing for bankruptcy in November, and its products remain under scrutiny of the Food and Drug Administration, which pulled them off shelves nationwide briefly did last year. In September, Altria ended its noncompete agreement with Juul.

The Altria-NJOY deal includes $500 million in cash payments contingent on certain regulatory outcomes with NJOY products.

NJOY has six products that have received full approval for sale from the U.S. Food and Drug Administration. It’s one of the few vaping companies whose products have clearance from federal regulators.

“We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition,” Gifford added.