Altria Invests $12.8 Billion in Juul for 35% Stake

(Bloomberg) -- Altria has signed and closed a $12.8 billion investment in Juul Labs representing a 35% stake which values Juul at $38 billion.

• Altria and Juul also signed service agreements which will accelerate Juul’s mission to switch adult smokers to e-vapor products including retail shelf space with
• Juul will remain fully independent, with Altria subject to a standstill agreement under which it may not acquire additional Juul shares above its 35% interest
• Upon antitrust clearance, Altria’s 35% non-voting shares will automatically convert to 35% voting shares and Altria will be able to appoint directors representing one-third of Juul’s board
• Altria financed the Juul stock purchase through a $14.6 billion term loan facility arranged by JPMorgan Chase Bank
• Also, Altria announced a cost reduction program designed to deliver about $500 million to $600 million in annualized cost savings by the end of 2019, and Altria sees total pretax restructuring charges in connection of about $230 million to $280 million, or $0.09 per share to $0.11 per share
• Altria reaffirms its FY18 adjusted EPS guidance in a range of $3.95 to $4.03, for FY19 Altria sees adjusted EPS slightly below the low end of its long-term 7%-9% view due to the debt incurred with the Juul and Cronos deals
• Perella Weinberg Partners and J.P. Morgan Securities are the financial advisors to Altria for this transaction and Goldman Sachs is the financial advisor to Juul
• Altria will webcast a conference call at 9am ET today

To contact the reporter on this story: Nick Lichtenberg in New York at nlichtenberg@bloomberg.net

To contact the editor responsible for this story: Chakradhar Adusumilli at cadusumilli@bloomberg.net

©2018 Bloomberg L.P.