The participation of the giant Altria (Marlboro) in Juul ask question for a few days. Indeed, fearing having paid too much for its small stake in the e-cigarette maker Juul, the Altria group is now trying to dispel the concern of its investors.
Last Thursday, the company Altria sought to dispel the concern of investors fearing to have paid too much for participation in the manufacturer of electronic cigarettes Juul.
In December, the tobacco giant spent $ 12,8 billion to acquire 35% of the capital of Juul, a company that dominates the vaping market in the United States and which in just a few years went from a small start-up to a company listed at 38 billion. To know that the participation of Altria is frozen at 35% for the next six years.
This agreement has offered Altria something that its core business does not necessarily know: Growth. Yet investors and analysts have complained that Altria, the largest US tobacco company, has paid too much for too little. In addition, there is a problem that Juul faces a public relations crisis and regulatory uncertainty to fuel what public health officials call an "epidemic" of vaping.
Howard Willard, CEO of Altria, tried Thursday to mitigate these concerns, highlighting the benefits of the deal by a phone call with analysts discussing the 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 has reached more than $ 1 billion in 2018, compared to about 200 in 2017, Willard told analysts. He estimates that Juul controls about 34% of the total market for electronic cigarettes.
Altria expects the sales volume of e-cigarettes to increase from 15% to 20% in the US 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 abroad.