NJOY Holdings

History

2023: Altria bought NJOY Holding for $2.75 billion

In early March 2023, one of the largest tobacco companies in the world Altria announced the purchase of e-cigarette manufacturer NJOY Holdings for $2.75 billion. Through the deal, Altria's product portfolio will include three categories of smokeless tobacco technology from NJOY Holdings. Altria will also take ownership of a joint venture between NJOY Holdings and JT Group for commercialization USA in heated tobacco sticks. NJOY Holdings is developing products that will be an alternative to traditional cigarettes. These products contain nicotine, have a rich taste and give the aroma familiar to smokers, but do not produce smoke.

The deal with NJOY Holdings will include an additional $500 million in cash that will depend on the results of regulation regarding certain NJOY products. Altria reported that the company has several sources of funding for the deal, including $2.7 billion in cash from an agreement concluded in 2022 with Philip Morris International to develop an IQOS tobacco heating system. Altria management did not provide a timeline for the completion of the transaction, but confirmed its earnings forecast in the range of $4.98 to $5.13 per share in 2023.

Altria buys one of NJOY Holding's biggest e-cigarette makers

We believe our commercial resources can benefit adult tobacco users and increase market competition. E-cigarettes or electronic nicotine delivery systems in the U.S. are increasingly being used by people as a substitute for traditional cigarettes or for recreational purposes, Altria Chief Executive Officer Billy Gifford said in a statement.

Altria, the largest cigarette maker in the United States, tried to acquire an e-cigarette maker until March 2023 as smoking of traditional cigarettes declined in the United States. Tobacco giant Altria paid $12.8 billion in 2018 for a 35% stake in Juul Labs, but the vaping market leader collapsed in 2022.

According to Mordor Intelligence analysts, the US e-cigarette market is highly competitive due to the presence of many large players. The business is consolidated with key players serving most of the market - Philip Morris, Imperial Brands, Japan Tobacco, British American Tobacco. The U.S. e-cigarette market is expected to record a CAGR of 11.6% during the forecast period 2022-2027.^[1]

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