The participation of the giant Altria (Marlboro) in Juul has been asking questions for a few days. Indeed, fearing to have paid too much for its small stake in the e-cigarette manufacturer Juul, the Altria group is now trying to allay the concerns of its investors.
AN AMOUNT TOO MUCH FOR 35% IN JUUL?
Last Thursday, the Altria company sought to allay investor concern that they had overpaid for the stake in e-cigarette maker Juul.
In December, the tobacco giant spent $ 12,8 billion to acquire 35% of the capital of Juul, a company which dominates the vaping market in the United States and which has grown in a few years from a small start-up to a company listed at $ 38 billion. Note that Altria's stake is frozen at 35% for the next six years.
This agreement offered Altria something that its core business does not necessarily know any more: Growth. Yet investors and analysts have complained that Altria, America's largest tobacco company, overpaid for too little share. Additionally, there is a problem with Juul facing a PR crisis and regulatory uncertainty to fuel what public health officials are calling a vaping “epidemic”.
Howard WillardAltria CEO on Thursday tried to alleviate those concerns, highlighting the benefits of the deal with a phone call with analysts discussing fourth quarter results. He answered countless questions about the contract.
« If you add to Juul's already considerable capabilities, our expertise in juvenile smoking prevention and our ability to connect directly with adult smokers, we see a bright future with long-term benefits for adult consumers and our shareholders" , did he declare.
Juul's revenue reached over $ 2018 billion in 200, up from around $ 2017 million in 34, Willard told analysts. He estimates that Juul controls around XNUMX% of the total electronic cigarette market.
Altria expects e-cigarette sales volume to grow 15% to 20% in the United States by 2023, Willard said. More importantly, Juul is also available in eight markets outside the United States, while Altria does not sell any tobacco products overseas.
