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RICHMOND, Va.--(BUSINESS WIRE)--Mar 6, 2023--
Altria Group, Inc. (NYSE:MO) announces that we have entered into a definitive agreement to acquire NJOY Holdings, Inc. (NJOY) for approximately $2.75 billion in cash payable at closing (Transaction). The Transaction terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.
“We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a standalone company,” said Billy Gifford, Altria’s Chief Executive Officer. “We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY's talented employees to Altria at closing.”
“As a result of this Transaction, Altria’s enhanced smoke-free portfolio will include full global ownership of products and technologies across the three largest smoke-free categories and a joint venture with JT Group for the U.S. commercialization of heated tobacco stick products.”
“We are excited to add NJOY’s e-vapor intellectual property as a new platform that we believe we can build on to help more adult smokers transition to smoke-free alternatives,” said Olivier Houpert, Altria’s new Chief Innovation and Product Officer.
A conference call with the investment community and news media will be webcast at 9:00 a.m. Eastern Time on March 6, 2023. Access to the live webcast is available at www.altria.com/webcasts. A replay of the webcast and a transcript will be available on the same website following the event.
U.S. E-Vapor Marketplace and Regulatory Dynamics
Strategic Rationale
NJOY Product Portfolio
NJOY also currently sells menthol-flavored e-vapor products. NJOY submitted PMTAs for these products prior to the FDA deadline of September 9, 2020, and those PMTAs remain under FDA review.
Transaction Assumptions
Transaction-Related Financial Implications
Closing Conditions
The Transaction is subject to customary closing conditions, including reporting requirements under the Hart-Scott-Rodino Act.
Preventing Underage Use of E-Vapor Products
Addressing underage use of tobacco products is critical for us to achieve our Vision. We have continued to enhance our ongoing support for underage prevention, including through legislative advocacy and retailer engagement. Our efforts have included:
2023 Financial Impact
Advisors
Perella Weinberg Partners LP and Morgan Stanley & Co. LLC are acting as financial advisors to Altria in connections with the Transaction. Morgan Stanley Senior Funding, Inc. has committed to provide short-term financing to Altria. White & Case LLP and Arnold & Porter LLP are providing legal counsel to Altria for the Transaction.
Moelis & Company LLC is acting as the financial advisor to NJOY in connection with the Transaction. Weil, Gotshal & Manges LLP is providing legal counsel to NJOY for the Transaction.
Forward-Looking and Cautionary Statements
This release contains certain forward-looking statements with respect to, among other things, the Transaction and the full global ownership of NJOY’s e-vapor product portfolio, which is subject to various risks and uncertainties. These forward looking statements relate to, among other things, the expected timing of the completion of the Transaction, the preferences of adult smokers and adult vapers, the ability to transition adult smokers from combustible products to e-vapor products over the long term, the ability to prevent and reduce underage use of tobacco products, receipt of MGOs from the FDA for various e-vapor products and devices, the ability to expand the retail distribution and visibility of NJOY ACE products through our leading U.S. sales and distribution system, the market for the e-vapor category of products, the financial impact of the Transaction on our results of operations, and our ability to continue NJOY’s commercial relationship with Smoore. Factors that may cause actual results to differ include failure to receive regulatory authorizations, failure to comply with regulatory requirements, our inability to realize the expected benefits of the Transaction in the expected manner or timeframe, if at all, prevailing economic, market, regulatory or business conditions, or changes in such conditions, negatively affecting us and our plans with respect to the e-vapor category, our inability to anticipate and respond to evolving adult tobacco consumer preferences, and to develop, manufacture, market and distribute products that appeal to adult tobacco consumers, a downgrade in our credit ratings, our inability to refinance any acquisition financing on favorable terms, or at all, health epidemics and pandemics, macroeconomic conditions and, in turn, adult tobacco consumer purchasing behavior, changes in market and other conditions resulting in unanticipated delays in the design and development of future products, the outcome of any legal proceeding or investigation that may be instituted against us or others related to the Transaction, significant changes in price, availability or quality of raw materials or component parts, including as a result of changes in macroeconomic, climate and geopolitical conditions, the failure to meet commercialization milestones, and extended disruption at a facility of, or of service by, a supplier, distributor or distribution chain service provider of our subsidiaries (including NJOY following the Transaction). Other risk factors that may cause actual results and outcomes to differ materially from those contained in the projections and forward-looking statements included in this press release are detailed from time to time in our publicly filed reports, including our Annual Report on Form 10-K for the year ended December 31, 2022. These forward-looking statements speak only as of the date of this press release. We assume no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this release.
Altria’s Profile
We have a leading portfolio of tobacco products for U.S. tobacco consumers age 21+. Our Vision by 2030 is to responsibly lead the transition of adult smokers to a smoke-free future (Vision). We are Moving Beyond Smoking ™, leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices - believing it is a substantial opportunity for adult tobacco consumers, our businesses and society.
Our wholly owned subsidiaries include leading manufacturers of both combustible and smoke-free products. In combustibles, we own Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette manufacturer, and John Middleton Co. (Middleton), a leading U.S. cigar manufacturer. Our smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, and Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches.
Additionally, we have a majority-owned joint venture, Horizon Innovations LLC (Horizon), for the U.S. marketing and commercialization of heated tobacco stick products and, through a separate agreement, we have the exclusive U.S. commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.
Our equity investments include Anheuser-Busch InBev SA/NV (ABI), the world’s largest brewer, and Cronos Group Inc. (Cronos), a leading Canadian cannabinoid company.
The brand portfolios of our tobacco operating companies include Marlboro ®, Black & Mild ®, Copenhagen ®, Skoal ® and on! ®. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission.
Learn more about Altria at www.altria.com and follow us on Twitter, Facebook and LinkedIn.
Schedule 1 | |||||||||||||||
ALTRIA GROUP, INC. | |||||||||||||||
Reconciliation of Altria’s Full-Year 2022 Adjusted Results | |||||||||||||||
| Earnings | Provision | Net | Net Earnings | Diluted | ||||||||||
2022 Reported | $ | 7,389 |
| $ | 1,625 |
| $ | 5,764 |
| $ | 5,764 |
| $ | 3.19 |
|
NPM Adjustment Items |
| (68 | ) |
| (17 | ) |
| (51 | ) |
| (51 | ) |
| (0.03 | ) |
Asset impairment, exit, implementation, acquisition and disposition-related costs |
| 11 |
|
| 2 |
|
| 9 |
|
| 9 |
|
| — |
|
Tobacco and health and certain other litigation items |
| 131 |
|
| 33 |
|
| 98 |
|
| 98 |
|
| 0.05 |
|
JUUL changes in fair value |
| 1,455 |
|
| — |
|
| 1,455 |
|
| 1,455 |
|
| 0.81 |
|
ABI-related special items |
| 2,544 |
|
| 534 |
|
| 2,010 |
|
| 2,010 |
|
| 1.12 |
|
Cronos-related special items |
| 186 |
|
| — |
|
| 186 |
|
| 186 |
|
| 0.10 |
|
Income tax items |
| — |
|
| 729 |
|
| (729 | ) |
| (729 | ) |
| (0.40 | ) |
2022 Adjusted for Special Items | $ | 11,648 |
| $ | 2,906 |
| $ | 8,742 |
| $ | 8,742 |
| $ | 4.84 |
|
While we report our financial results in accordance with GAAP, our management reviews certain financial results, including diluted EPS, on an adjusted basis, which excludes certain income and expense items, including those items noted under “2023 Financial Impact” in the release. Our management does not view any of these special items to be part of our underlying results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Our management believes that adjusted financial measures provide useful additional insight into underlying business trends and results and provide a more meaningful comparison of year-over-year results. Our management uses adjusted financial measures for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. These adjusted financial measures are not required by, or calculated in accordance with GAAP and may not be calculated the same as similarly titled measures used by other companies. These adjusted financial measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.
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CONTACT: Altria Client Services
Investor Relations
804-484-8222Altria Client Services
Media Relations
804-484-8897
KEYWORD: UNITED STATES NORTH AMERICA VIRGINIA
INDUSTRY KEYWORD: TOBACCO RETAIL
SOURCE: Altria Group, Inc.
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PUB: 03/06/2023 07:00 AM/DISC: 03/06/2023 07:01 AM
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