Marlboro cigarette maker Altria has agreed to pay almost $12.8 billion for a 35 percent stake in JUUL Labs.
The deal was approved late on Wednesday before being formally announced at the opening of the stock exchange on Thursday morning.
The news is set to divide opinion throughout the vaping industry and beyond.
JUUL Labs CEO Kevin Burns said in a prepared statement:
“We understand the controversy and skepticism that comes with an affiliation and partnership with the largest tobacco company in the US. We were skeptical as well. But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers. We understand the doubt. We doubted as well.”
Altria announced earlier this month that it would cease manufacturing its MarkTen and Green Smoke cigalikes, but that the company “remain[ed] committed to being the leader in providing adult smokers innovative alternative products that reduce risk, including e-vapor.”
The JUUL stake will allow Philip Morris USA’s parent company to maintain a foothold in the reduced-risk product market.
JUUL has come under sustained attack from the US media and anti-tobacco groups following a rise in underage vaping. The company will be hoping that Altria’s experience and financial clout will be invaluable resources as they fight to survive and thrive in a hostile climate.
Anti-smoking advocate David Sweanor said:
“Instead of just trying to survive an onslaught from F.D.A. regulators and abstinence-only campaigners creating a moral panic about their product, they can move to rapidly expanding with a global orientation and funding the R&D necessary to disrupt ever more of the $800 billion global cigarette market.”