TY - JOUR T1 - Altria-Juul Labs deal: why did it occur and what does it mean for the US nicotine delivery product market JF - Tobacco Control JO - Tob Control SP - e171 LP - e174 DO - 10.1136/tobaccocontrol-2019-055081 VL - 29 IS - e1 AU - David T Levy AU - David Sweanor AU - Luz Maria Sanchez-Romero AU - Richard O'Connor AU - Maciej Lukasz Goniewicz AU - Ron Borland Y1 - 2020/12/01 UR - http://tobaccocontrol.bmj.com/content/29/e1/e171.abstract N2 - On 19 December 2018, Altria announced an offer of US$12.8 billion for a 35% share of Juul Labs.1 2 The deal combines Altria (formerly Philip Morris),3 the company with the largest share of the US cigarette market, with the large and rapidly growing vaping product (aka e-cigarette) company, Juul Labs.4 5 The acquisition price was based on a US$38 billion valuation, which was more than twice Juul Labs’ August valuation, and a surprise to many investors on Wall Street.1 The deal includes a 6-year agreement, in which Altria would not be allowed to acquire additional Juul Labs shares above the agreed 35%. In addition, Altria dropped its MarkTen e-cigarette brand.2 Juul Labs has clear motivations for the merger. Besides the direct gain to Juul Labs’ owners from the acquisition price,1 they can also benefit in the legal and regulatory sphere. With its vast experience, Altria can provide Juul Labs support in legal battles regarding patent infringement6 7 and consumer health claims.8 9 With Juul Labs under pressure to respond to Food and Drug Administration (FDA) concerns about youth use of its product,10 Altria could also help them navigate the regulatory waters.The deal can also serve to strengthen Juul Labs’ future market prospects. The US vaping product industry is still rapidly growing.4 11 Within 5 years, the leading mass-manufactured vaping product in the USA has gone from N-JOY to Blu to Vuse to Juul.4 Juul, as the current leader, may be replaced by another technology, product or company. In particular, Juul Labs faces the challenges from competitors producing Juul-like vaping products (eg, BO, Phix and SMOK)12 and from open system products that are typically less expensive than Juul.4 Altria may directly help Juul Labs to increase sales. Altria has touted … ER -