Briefing

Altria Group writes down Juul investment by another US$4.1 billion

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The tobacco giant now values the vaping company at roughly US$12 billion, down from the US$38-billion valuation that saw it pay US$12.8 billion in cash for a 35 per cent stake in the company in December 2018. Altria had already written down its investment by US$4.5 billion in October 2019. (The Wall Street Journal)

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Talking point: Altria CEO Howard Willard said he was “highly disappointed” in the performance of the company’s investment. Since it bought in, e-cigarette manufacturers have faced lawsuits and increased regulatory pressure amid public health concerns and worries about vaping’s attractiveness to young people. Juul has tried to get ahead of the backlash; as my colleague Murad reported earlier this month, its Canadian subsidiary has temporarily stopped producing most flavours of its vaping pods—believed to be particularly appealing to the teens—in an attempt at “earning the trust of society.” That decision came after the parent company’s removal of most flavoured pods from the U.S. market over the last two years, in the lead-up to a federal ban. Altria also announced it will stop providing Juul with marketing and retail distribution, offering assistance with regulatory wrangling instead. Its shares were down nearly five per cent in late-day trading.