Daily Management Review

Altria announces loss of $ 4.5B investment in Juul


11/01/2019


In less than a year, one of the largest tobacco companies in the world lost more than 1/3 of the funds invested in electronic cigarette manufacturer Juul Labs Inc.



Mylesclark96 via flickr
Mylesclark96 via flickr
Altria Group’s statements for the III quarter and 9 months of 2019 note that the company recorded a pre-tax loss of $ 4.5 billion for investments in Juul.

During a conference call with investors on Thursday, October 31, Altria CEO Howard Willard said the company was “dissatisfied with Juul's write-offs,” noting also that Altria’s management “did not expect such dramatic changes in the e-cigarette segment”.

Altria announces acquisition of 35% Juul Labs Inc. for $ 12.8 billion on December 20, 2018.

The company noted that the reason for writing off more than 1/3 of these investments "was not a single factor or event, but a combination of factors." Among them were an increase in the likelihood of a ban on flavored electronic cigarettes from the US Food and Drug Administration (FDA), bans on the sale of electronic cigarettes adopted in various cities in the United States and other countries, as well as a number of other factors.

News about the preparation of a ban on the sale of electronic cigarettes at the federal level in the United States appeared in September 2019. Trump’s administration announced that they "intend to clear the market of flavored electronic cigarettes."

source: techcrunch.com






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