Tobacco giant Altria ends non-compete accord with Juul
Source: AFP
Tobacco giant Altria said Friday it ended a non-compete agreement with Juul, which is mired in a fight with a US agency over its ability to sell vaping products.
Altria, the parent company of Philip Morris USA and other brands in tobacco and nicotine, "exercised our option to be released from our Juul non-competition obligations," the company said in a securities filing.
The announcement allows Altria to pursue the acquisition of another vaping company, or to develop its own products.
Altria in late 2018 invested about $13 billion in Juul, a stake that has been written down several times as Juul has faced various government crackdowns.
Altria's move comes as Juul challenges a June action by the US Food and Drug Administration ordering all products made by Juul Labs off the market after finding the vaping giant had failed to address certain safety concerns.
The FDA order was suspended by a federal judge after an appeal by Juul.
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Juul has submitted an appeal to the FDA, arguing that its products are safe for adult smokers.
Juul said Friday that the end of the non-compete clause with Altria "gives us more flexibility as it increases the financial and strategic options we can pursue to secure our business and address the impact of the FDA's now stayed order," a Juul spokesman said.
"As we continue to operate in the market and go through the FDA's review process, we remain confident in our science and evidence and believe that we will be able to demonstrate that our products do in fact meet the statutory standard of being 'appropriate for the protection of the public health.'"
The agreement between the companies released Altria if its Juul investment falls below 10 percent of its initial value. At June 30, Altria's investment in Juul was valued at $450 million.
Source: AFP
