Philip Morris and Altria Scrap Merger Talks
Altria executive will take the helm at JUUL as CEO steps down.
Sep 25, 2019
ALEXANDRIA, Va.—Altria Group Inc. and Philip Morris International Inc. have ended talks to reunite in a merger, the Wall Street Journal reports. Separately, an executive at Altria will replace JUUL Labs Inc. CEO Kevin Burns, who is stepping down, the paper reports. Altria owns a 35% stake in JUUL.
K.C. Crosthwaite, chief strategy officer, Altria, is set to take the helm at JUUL. The San Francisco-based e-cigarette company said it would shelve all of its U.S. product advertising, the Wall Street Journal reports, and won’t fight the Trump Administration’s pending ban on non-tobacco-flavored vaping products.
Earlier this month, the U.S. Food and Drug Administration (FDA) sent a warning letter to JUUL Labs, alleging that the company is illegally advertising nicotine pods as a safer alternative to traditional cigarettes without FDA approval. The agency threatened to fine or seize JUUL products if it didn’t change its marketing.
As reported in NACS Daily, news emerged in August that Altria and Philip Morris were considering a tie-up. Both companies market Marlboro cigarettes and other branded tobacco products in the U.S. and international market. The companies split more than 10 years ago, leaving Altria to handle U.S. sales and Philip Morris to focus on international sales.
The companies plan to concentrate their e-cigarette efforts on the U.S. launch of IQOS, an electronic device that heats tobacco-filled sticks wrapped in paper to generate a nicotine-containing aerosol. The system won approval from the FDA in May. Philip Morris already offers IQOS in the United Kingdom, Japan and other world markets.
Compliance and regulations Compliance and regulations Wholesaler Sustainability Tobacco
