RICHMOND, Va. – Yesterday, Altria Group Inc. announced a $12.8 billion investment in Juul Labs Inc. The service agreements will accelerate Juul’s mission to switch adult smokers to e-vapor products. Altria’s investment represents a 35% economic interest in Juul, valuing the company at $38 billion.
“We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes by investing $12.8 billion in Juul,” said Howard Willard, Altria’s chairman and CEO, in a press release. “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.”
Juul will remain fully independent and will have access to Altria’s infrastructure and services. Altria will provide Juul access to its premier 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.
“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, CEO 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.”