Altria Group has signed and closed a $12.8 billion investment in Juul Labs, the U.S. leader in vapor products. The service agreements will accelerate Juul’s mission to switch adult smokers to vapor products. Altria’s investment represents a 35 percent economic interest in Juul, valuing the company at $38 billion. Juul will remain fully independent.
“We are taking significant action to prepare for a future where adult smokers overwhelmingly choose noncombustible products over cigarettes by investing $12.8 billion in Juul, a world leader in switching adult smokers,” said Howard Willard, Altria’s chairman and chief executive officer.
“We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction. Through Juul, we are making the biggest investment in our history toward that goal. We strongly believe that working with Juul to accelerate its mission will have long-term benefits for adult smokers and our shareholders.”
“Altria’s investment sends a very clear message that Juul’s technology has given us a truly historic opportunity to improve the lives of the world’s one billion adult cigarette smokers,” said Kevin Burns, chief executive officer of Juul. “This investment and the service agreements will accelerate our mission to increase the number of adult smokers who switch from combustible cigarettes to Juul devices.”
Juul will remain fully independent and will have access to Altria’s extensive infrastructure and services. As part of the service agreements:
- Altria will provide Juul access to its premier innovative tobacco products retail shelf space, allowing Juul’s tobacco and menthol-based products to appear alongside combustible cigarettes. Juul’s flavored products will continue to only be available on Juul.com.
- Altria will enable Juul to reach adult smokers with direct communications through cigarette pack inserts and mailings to adult smokers via Altria companies’ databases.
- Altria will apply its logistics and distribution experience to help Juul expand its reach and efficiency and Juul will have the option to be supported by Altria’s sales organization, which covers approximately 230,000 retail locations.
Fueled by its unique and innovative Silicon Valley approach to product development and founded by former smokers, Juul has rapidly built an industry-leading position by satisfying adult tobacco consumers with its differentiated e-vapor products.
Juul has quickly grown both revenue and share, and today represents approximately 30 percent of the total U.S. vapor category, according to Altria. Juul has a deep innovation pipeline and currently operates in eight countries, with rapid international expansion plans.
“This is a unique and compelling opportunity to invest in an extraordinary company, the fastest growing in the U.S. vapor category. We are excited to support Juul’s highly-talented team and offer our best-in- class services to build on their tremendous success,” added Willard.