RICHMOND, Va.--(BUSINESS WIRE)--
Altria Group, Inc. (Altria) (NYSE: MO) today announces it has received a
request for additional information (Second Request) from the U.S.
Federal Trade Commission (FTC) relating to its investment in JUUL Labs,
Inc. (JUUL) that closed in December 2018.
Altria currently holds an approximate 35% non-voting, economic interest
in JUUL. Altria is now seeking to convert its JUUL interest to voting
securities pursuant to the terms of its investment. Following
conversion, Altria expects to account for its investment in JUUL under
the equity method of accounting and will have the right to designate
one-third of the members of JUUL’s board of directors. JUUL will remain
fully independent.
Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (HSR Act), Altria and JUUL filed notification of the proposed
conversion with the federal antitrust authorities and must observe a
waiting period before completing the conversion. As part of the HSR Act
review process, the FTC issued the Second Request on April 8, 2019 to
extend the waiting period while the FTC conducts its review. The waiting
period is extended until 30 days after the parties have substantially
complied with the Second Request, though it is common for that period to
be extended voluntarily by the parties or terminated sooner by the FTC.
Issuance of a Second Request is a normal part of the FTC’s investigation
process. Altria is cooperating with the FTC’s investigation and will
work to provide answers to the FTC’s outstanding questions promptly.
Altria continues to believe that its investment and the services Altria
has agreed to provide JUUL will promote competition and have long-term
benefits for adult smokers. Altria continues to anticipate that the
conversion of its JUUL shares will occur as planned.
Altria's Profile
Altria’s wholly-owned subsidiaries include Philip Morris USA Inc. (PM
USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co.
(Middleton), Sherman Group Holdings, LLC and its subsidiaries (Nat
Sherman), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip
Morris Capital Corporation (PMCC). Altria holds equity investments in
Anheuser-Busch InBev SA/NV (AB InBev), JUUL Labs, Inc. (JUUL) and Cronos
Group Inc. (Cronos Group).
The brand portfolios of Altria’s tobacco operating companies include Marlboro®,
Black & Mild®, Copenhagen®
and Skoal®. Ste. Michelle produces and markets
premium wines sold under various labels, including Chateau Ste.
Michelle®, Columbia Crest®,
14 Hands®and Stag’s Leap Wine Cellars™,
and it imports and markets Antinori®, Champagne
Nicolas Feuillatte™, Torres®and Villa Maria Estate™products in
the United States. Trademarks and service marks related to Altria
referenced in this release are the property of Altria or its
subsidiaries or are used with permission. More information about Altria
is available at altria.com and on the Altria Investor app.
Forward-Looking and Cautionary Statements
This release contains projections of future results and other
forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995.
Important factors that may cause actual results and outcomes to differ
materially from those contained in such forward-looking statements
include, without limitation, the possibility that regulatory approvals
required for the conversion of the shares into voting shares may not be
obtained in a timely manner, if at all; and that such approvals may be
subject to unanticipated conditions. Other important factors include the
possibility that the expected benefits of the transaction may not
materialize in the expected manner or timeframe, if at all; the
potential inaccuracy of the financial projections (including, without
limitation, projections relating to JUUL’s domestic growth and
international expansion); prevailing economic, market, regulatory or
business conditions, or changes in such conditions, negatively affecting
the parties; the risk of a downgrade in Altria’s credit ratings; risks
that the transaction disrupts JUUL’s current plans and operations; the
fact that Altria’s reported earnings, financial position and use of
equity accounting and any future dividends paid by JUUL on shares owned
by Altria may be adversely affected by tax and various other factors,
such as the risks encountered (including, without limitation, regulatory
and litigation risks) and decisions made by JUUL in its business; risks
related to the investment disrupting Altria, JUUL or their respective
management; and risks relating to the effect of the transaction on
JUUL’s ability to retain and hire key personnel or on its relationships
with customers, suppliers and other third parties. These factors and
other important factors that may cause actual results and outcomes to
differ materially from those contained in projections and forward
looking statements are described in Altria’s publicly filed reports,
including its Annual Report on Form 10-K for the year ended December 31,
2018.
Altria cautions that the foregoing list of important factors is not
complete and does not undertake to update any forward-looking statements
that it may make except as required by applicable law. All subsequent
written and oral forward-looking statements attributable to Altria or
any person acting on its behalf are expressly qualified in their
entirety by the cautionary statements referenced above.
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Altria Client Services
Investor Relations
804-484-8222
Altria Client Services
Media Relations
804-484-8897
Source: Altria Group, Inc.