The proposed merger between US tobacco companies is abandoned, as the controversy over the e-cigarette grows.
Remarriage will not take place. Philip Morris International and Altria announced, by mutual agreement, Wednesday, September 25, the abandonment of their proposed merger. The romance between the two American behemoths, who have shared custody of the iconic Marlboro cigarette brand, has been short-lived. The banns were published Tuesday, August 27 and the operation presented as a merger between equals to form a package weighing 55 billion dollars (50 billion euros). The ambition was then to bring together two companies that had chosen to separate in 2008, Altria wearing the brand cowboy in the United States, when Philip Morris International marketed it outside the US borders.
At the very moment when the wedding went up in smoke, a head rolled in the dust. In this case, that of the CEO of Juul, Kevin Burns. The almost simultaneous publication of the two communiqués is not a coincidence. Juul has, in fact, passed, in a few months, the status of start-up envy of Silicon Valley to that of company criticized for the risks related to vaping. A real turnaround for this specialist e-cigarette. However, in December 2018, Altria had made an impression by paying 12.8 billion dollars to acquire 35% of the capital of Juul.
Launched in 2015, the Juul vapers have been a huge success across the Atlantic. A real trail of powder … Their design in the form of a USB key, the perfumes of the refills, with the taste of mango, strawberry or mint, a strong dosage in nicotine and a powerful marketing seduced the crowds, and in particular the teenagers. As a result, sales exceeded $ 1 billion over the last twelve months. A development under the leadership of Mr. Burns, a former executive of the American yogurt maker Chobani, who joined the adventure in 2016. But the craze for e-cigarette began to smell the scorched.
The attractiveness of these vapers to high school students has been controversial, the US health authorities even speak of an "epidemic". They highlighted the risk of addiction to nicotine, but also to other drugs consumed through it. In this context, the city of San Francisco voted, in June, an order to ban the sale of electronic cigarettes from 2020. Other states have, they, decided to ban the flavored versions, to the example of Michigan or New York. The largest US distribution chain, Walmart, has announced that it will stop commercializing the e-cigarette after having sold off its inventory.