Altria Shows Intentions to Acquire NJOY

After declaring bankruptcy in 2016, NJOY, Inc. reorganized to become NJOY LLC, which is now mostly controlled by the hedge fund Mudrick Capital Management.
Altria Shows Intentions to Acquire NJOY

The acquisition of NJOY, the only independent vaping company with FDA-approved products, is being discussed by Altria Group. The talks are "advanced," and Altria would give up its 35 percent stake in Juul Labs should the deal close. The Wall Street Journal broke the story first.

Altria, the company that makes Marlboro cigarettes, is not involved in the vaping industry other than through its ownership of Juul. There wouldn't be any FDA-approved vaping products that aren't owned by a big tobacco firm if Altria were to purchase NJOY. (Logic is owned by Japan Tobacco International, while Vuse is owned by R.J. Reynolds/British American Tobacco.)

Last year, NJOY brought in financial specialists to counsel the business on possible sales. The business then thought a sale would fetch $5 billion, but the Journal reports that talks are now centered around a $2.75 billion starting point.

Altria wants NJOY, but why?

Customers are drawn to NJOY because it already has two FDA-approved vaping products: the disposable NJOY Daily and the pod-based NJOY Ace. As the only contemporary, FDA-approved pod-based vape, the Ace has the potential to compete with Juul Labs' JUUL and the Vuse Alto, provided NJOY secures the necessary funding to boost manufacturing and broaden distribution.

Currently, NJOY only holds 3% of the vaping market's convenience store/gas station segment. However, Altria, the biggest cigarette manufacturer in the country, has the financial means and extensive distribution networks to overcome production obstacles.

Currently holding 35 percent of Juul Labs, the firm was valued at $38 billion when it was purchased by Altria in 2018 for $12.8 billion. Altria used its right to terminate its non-compete agreement with Juul Labs in September of last year after Juul's value fell below 10% of its initial peak. As of right moment, Altria values Juul at $714 million, as reported by the Wall Street Journal.

Altria would probably have to sell its stake in Juul to allay antitrust worries if it were to acquire NJOY, another vape startup, or start making its e-cigarettes. (The Federal Trade Commission has already accused Altria and Juul of engaging in anti-competitive behavior; the FTC is currently appealing this accusation.)

2010 saw NJOY save vaping.

Attorney Mark Weiss established NJOY, Inc. in Arizona, and the company started selling first-generation e-cigarettes in 2007. Weiss and other manufacturers sued the FDA in court after the government designated e-cigarettes as unapproved drug/delivery devices and started confiscating items coming from China. The manufacturers eventually won in 2010, preserving the nascent business.

After declaring bankruptcy in 2016, NJOY, Inc. reorganized to become NJOY LLC, which is now mostly controlled by the hedge fund Mudrick Capital Management. Mudrick Capital Management has been running NJOY ever then.

men - 1 About Author
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Kevin S. is an experienced vape writer and collector of VaporBoss. I have been writing about disposables, e-liquids, and vape coils for half a decade now. With a commitment to accuracy and clarity, I guide readers through the maze of information, providing valuable insights for both beginners and experienced vapers. My writing not only demystifies the technical jargon, but also delves into the cultural nuances, trends, and regulations that shape the ever-evolving vaping community.

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