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Altria's Juul Stake Up In The Air Due To FTC Review, WSJ Reports

Altria Group Inc (NYSE: MO) investment in Juul is up in the air a year after the deal was made, as U.S.

Benzinga · 01/17/2020 13:29

Altria Group Inc (NYSE: MO) investment in Juul is up in the air a year after the deal was made, as U.S. federal antitrust officials are probing the tobacco company's reach in the sector, The Wall Street Journal reported Friday, citing people familiar with the matter.

In December 2018, Altria paid $12.8 billion for a 35% stake in the e-cigarette company. Altria later announced a $4.5-billion impairment charge on the investment.

The FTC is looking at Altria’s acquisition of additional retail shelf space in convenience stores and other outlets for its e-cigarette products, MarkTen, at the same time it was winding down that business and preparing to purchase a stake in Juul, the Journal reported. 

Altria cannot convert its nonvoting shares, appoint representatives to Juul's board or count the e-cigarette manufacturer's earnings toward its own until the regulatory review is complete, the publication said. 

Earlier this year, the U.S. Food and Drug Administration banned most fruit-flavored vaping cartridges.

The FDA said the ban covers fruit and mint flavors, which left manufacturers only able to produce tobacco or menthol-flavored vaping cartridges.

Altria shares were down 0.31% at $51.09 at the time of publication Friday. The stock has a 52-week high of $57.88 and a 52-week low of $39.30.

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Photo courtesy of Juul.