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Marlboro-maker Altria takes stake in Juul e-cigarette firm | Marlboro-maker Altria takes stake in Juul e-cigarette firm |
(35 minutes later) | |
Marlboro cigarette maker Altria is buying a $12.8bn (£10bn) minority stake in vaping company Juul Labs. | Marlboro cigarette maker Altria is buying a $12.8bn (£10bn) minority stake in vaping company Juul Labs. |
The marriage between a traditional tobacco giant and Juul underlines how the fast-growing e-cigarette is changing tastes among smokers. | The marriage between a traditional tobacco giant and Juul underlines how the fast-growing e-cigarette is changing tastes among smokers. |
Altria said in a statement the move was preparation "for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes". | Altria said in a statement the move was preparation "for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes". |
Altria is buying 35% of San Francisco-based Juul, valuing it at £38bn. | Altria is buying 35% of San Francisco-based Juul, valuing it at £38bn. |
When Juul raised money from private investors in July, the funding valued the company at about $16bn. Juul was founded only three years ago. | When Juul raised money from private investors in July, the funding valued the company at about $16bn. Juul was founded only three years ago. |
The company is the US market leader in e-cigarettes, and the Altria deal is expected to give it more prominent distribution in convenience stores and other traditional retail channels. | The company is the US market leader in e-cigarettes, and the Altria deal is expected to give it more prominent distribution in convenience stores and other traditional retail channels. |
It is also possible that Juul will be able to tap into Altria's years of lobbying expertise in Washington at a time when e-cigarettes are coming under greater health scrutiny. | It is also possible that Juul will be able to tap into Altria's years of lobbying expertise in Washington at a time when e-cigarettes are coming under greater health scrutiny. |
Juul has boosted its lobbying spending throughout this year, spending $890,000 so far, according to the Center for Responsive Politics. | Juul has boosted its lobbying spending throughout this year, spending $890,000 so far, according to the Center for Responsive Politics. |
However, that is dwarfed by Altria's spending of more than $7m this year, making it the biggest spender in the US tobacco industry. | However, that is dwarfed by Altria's spending of more than $7m this year, making it the biggest spender in the US tobacco industry. |
Last month, in another diversification away from its traditional products, Altria made a $1.8bn investment in a Canadian cannabis producer, Cronos. | |
E-cigarettes heat a liquid to generate a vapour. Juul's devices, which look like a USB flash drive, grew from 13.6% of the market in early 2017 to more than 75% this month, according to a Wells Fargo analysis of Nielsen retail data. | E-cigarettes heat a liquid to generate a vapour. Juul's devices, which look like a USB flash drive, grew from 13.6% of the market in early 2017 to more than 75% this month, according to a Wells Fargo analysis of Nielsen retail data. |
There has been concern about the popularity of vaping among young people. Last month, the US Food and Drug Administration announced new curbs on sales of flavoured e-cigarette products, including Juul's mango and cool cucumber. | There has been concern about the popularity of vaping among young people. Last month, the US Food and Drug Administration announced new curbs on sales of flavoured e-cigarette products, including Juul's mango and cool cucumber. |
Earlier this month Altria, whose Marlboro Man branding was once a symbol of tobacco's popularity, said it would discontinue some of its own e-cigarette brands. | Earlier this month Altria, whose Marlboro Man branding was once a symbol of tobacco's popularity, said it would discontinue some of its own e-cigarette brands. |