Altria Group, one of the world’s largest tobacco companies, has found a new way to enter the electronic cigarettes and vaping market. On Tuesday, the parent company of Philip Morris USA, which is famous for its Marlboro brand of cigarettes, announced the acquisition of e-cigarettes startup Njoy.
According to Reuters, Altria paid $2.75 billion in cash to purchase Njoy. The price could go up another $500 million if US Food and Drug Administration (FDA) approves some startup’s upcoming products.
Njoy acquisition comes after Altria previously invested in popular vaping startup Juul, buying a 35% stake in the company for $12.8 billion in 2018. At the time, Juul was the most popular electronic cigarette brand in the U.S., with more than 70% of the market share. However, a series of regulatory and legal challenges caused Juul’s market share to fall to around 20% in 2022 while the value of Altria’s investment dwindled to $250 million.
Njoy, on the other hand, has received FDA approval for six of its products, meaning they can be legally marketed and sold in the United States.
“(NJOY) is an authorized product versus a pending product (from Juul). There are no litigation challenges. The youth usage is at a minimum and so that brings a level of certainty,” said Altria CEO Billy Gifford in a statement.