Altria announced today that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 related to the company's previously announced pending acquisition of NJOY Holdings has expired.
Altria announced today that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 related to the company's previously announced pending acquisition of NJOY Holdings has expired.
This confirms that no further regulatory review of the transaction by federal antitrust authorities is required. Subject to other customary closing conditions.
Altria said it expects to close the acquisition in the second quarter of 2023.
According to Altria, by 2022, the U.S. vaping category includes nearly 14 million U.S. adult tobacco consumers, including 9.5 million exclusive adult vapers. The segment generates approximately $7 billion in retail sales in the United States, representing approximately 15% of total estimated equivalent U.S. tobacco sales and more than 50% of total estimated equivalent smokeless tobacco sales.
To date, the FDA has approved 23 vaping products and devices for sale. In 2022, NJOY received a marketing license order for the NJOY Ace device, as well as several tobacco-flavored pods. The regulator is still reviewing NJOY's premarket tobacco product application for several NJOY mint-flavored e-vapor products.
Altria said the deal was funded from a variety of sources, including cash from a $2.7 billion agreement with Philip Morris International last year for the IQOS tobacco heating system.
Ahead of the NJOY deal, Altria announced it would trade its entire minority investment in struggling Juul Labs in exchange for a non-exclusive global license to certain Juul heated tobacco intellectual property.
As of this writing, Njoy Holdings has received a total of 6 of 23 marketing orders awarded by the FDA for the entire vaping product category, including pods, disposables and open systems.
Altria CEO Billy Gifford said a major factor in Altria's purchase of Njoy was that the Ace device doesn't have the stigma associated with teen vaping.
"We believe that Njoy has taken a responsible approach to marketing its products. According to the 2022 National Youth Tobacco Survey, Njoy branded products are not among the brands commonly used by middle school and high school vapers. Additionally, Njoy is developing access restriction technology for its devices , to further address the issue of underage use," Gifford explained. “Our consumer research shows that once consumers try Njoy Ace, it becomes a competitive product for both smokers and vapers. After trying the licensed non-menthol Ace variant, 19 % of interviewed smokers and 27% of interviewed e-cigarette users said they would definitely buy the product.” (Compiled by Blue Hole.)
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