E-cigarette maker Juul's deal with Marlboro owner mired in antitrust probe
Altria's role in Juul CEO's exit under FTC microscope
Fox Business Briefs: Juul is stopping the sale of fruit-flavored pods in Canada amid an internal review.
The Federal Trade Commission is reportedly still conducting depositions as part of its antitrust investigation into cigarette maker Altria's 2018 purchase of a sizeable stake in e-cigarette maker Juul.
The Malboro owner purchased a 35 percent share in the embattled e-cigarette maker in December 2018 for $12.8 billion, and Altria confirmed the FTC investigation into the deal in regulatory filings in October.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MO | ALTRIA GROUP INC. | 55.85 | -0.49 | -0.87% |
The agency was expected to make a decision regarding the investment by early January, but a source familiar with the matter told The Wall Street Journal that the agency's deadline to approve or reject the deal passed last week without signoff.
Juul products are displayed at a smoke shop in New York. (AP Photo/Seth Wenig, File)
The FTC was "seeking information regarding, among other things, Altria’s role in the resignation of Juul's former chief executive officer and the hiring by JUUL of any current or former Altria director, executive or employee," executives wrote in the filing.
Without the agency's approval of the deal, Altria's shares will remain nonvoting, the company cannot appoint any of its representatives to Juul's board, and it cannot count Juul's earnings toward its own.
ALTRIA WRITES DOWN INVESTMENT IN JUUL BY A THIRD -- $4.5 BILLION
The FTC told FOX Business that it does not comment on proposed mergers, nor does it confirm investigations.
Former Juul CEO Kevin Burns resigned in September; he was replaced by Altria growth officer K.C. Crosthwaite. The e-cigarette maker then hired Altria's former head of regulatory affairs, Joe Murillo, in October.
A man exhaling smoke from an electronic cigarette in Washington, DC on October 2, 2018. (Photo by EVA HAMBACH / AFP)
The tie-up of the two companies represented a major reordering of the cigarette industry, which is being roiled by technological innovation and new government regulations. Juul is the dominant e-cigarette player, with vaporizers resembling USB sticks and refill pods containing nicotine-laced liquid.
While Juul's popularity has boomed in the last three years, especially among young people, the e-cigarette maker's future has become uncertain following the outbreak of a vaping-related lung disease that has killed 60 people in 27 states as of Jan. 14, according to the Centers for Disease Control and Prevention.
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The use of vape products that contain Vitamin E and illicit THC have been strongly linked to the disease known as "e-cigarette, or vaping, product use-associated lung injury (EVALI)," the CDC reported. THC is the ingredient in marijuana that produces a chemical high.
Since the outbreak, Juul's value has decreased by about one-third. The Trump administration issued a ban on certain flavored e-cigarettes earlier this month.
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FOX Business' Evie Fordham contributed to this report.