Altria Eyeing a Minority Stake in Juul

The Wall Street Journal published a news item revealing that combustible cigarette maker Altria is having discussions with Juul Labs in order to acquire a significant minority stake in the electronic cigarette giant. It is widely expected that the outcome of those talks will be announced in a few weeks. But why would Juul be reversing its earlier distance from “Big Tobacco” firms in its marketing efforts? Juul has the lion’s share of the e-cig market (75 percent) and it has come under intense pressure from regulators regarding the popularity of its products among teens. Teaming up with Altria could be a mutually beneficial arrangement in which Juul Labs benefits from the decades Altria has in dealing with tough regulatory scrutiny and pressure, while Altria stands to line its coffers with earnings from the sale of Juul products. Interestingly, both companies announced separately in recent weeks that they were halting the sale of some of their flavored e-cigarette products in light of concerns over teen vaping. How will this new deal affect the future of both companies?