Altria to acquire e-vapor play NJOY Holdings for $2.75 billion in cash to be paid at closing

Altria Group Inc.
said Monday it has agreed to acquire NJOY Holdings Inc. for about $2.75 billion cash to be paid at closing. The tobacco giant said the deal will give it control of all of NJOY’s e-vapor product portfolio and will include $500 million of additional payments based on reaching certain regulatory milestones. “We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition,” Altria CEO Billy Gifford said in a statement. The e-vapor category is no the largest smoke-free one in the U.S. and counts nearly 14 million adult tobacco consumers, including 9.5 million exclusive adult vapers. The sector generated sales of about $7 billion in the U.S. in 2022. The FDA regulates the category and most of the products on the market today have not received a so-called marketing granted order (MGO) from the FDA. NJOY has six products on the market that have received an MGO and other of its products are in the regulatory process. Altria expects the deal will be accretive to cash flow within two years of closing and boost adjusted per-share earnings within three years of closing. The company backed its guidance for 2023 of EPS of $4.98 to $5.13. The stock was slightly lower premarket and has fallen 13% in the last 12 months, while the S&P 500
has fallen 6.5%.