Altria Group (New York Stock Exchange: MO) announced Friday the exchange of its entire minority stake in Juul Labs for a non-exclusive global license to part of the intellectual property (agreement) of Juul’s heated tobacco.
This marks the end of of Altria (month) ill-fated investment in the e-cigarette firm that has been plagued by legal disputes in recent years, forcing it to pay out more than $1B in settlements late last year.
Speaking about the decision, CEO Billy Gifford said: “We believe that exchanging our ownership of JUUL for intellectual property rights is the appropriate path for our business. JUUL faces significant regulatory and legal challenges and uncertainties, many of which could exist for many years to come.” We continue to explore all options for how we can best compete in the e-vapor category.”
The tobacco giant valued its stake in Juul at just $250 million late last year, a 98% payback at valuation when it initially invested in the company in December 2018.
The company expects to record the financial impact of the deal in the first quarter of 2023 and intends to treat such amounts as a special item and exclude it from its adjusted diluted earnings per share. Altria (MO) posted a $100 million loss related to its investment in the vaping company in the fourth quarter of 2022.
Last week, Altria (MO) was said to be in advanced talks to buy NJOY Holdings in a deal that would value the maker of e-cigarettes and vaping products at $2.75 billion.