US authorities sue the tobacco giant

US, WASHINGTON (ORDO NEWS) — The US Federal Trade Commission (FTC) has sued the Altria Group to demand that the deal to buy a stake in Juul Labs violates antitrust laws.

In 2018, Altria, which owns well-known brands such as Marlboro and Skoal, bought for about $ 12.8 billion about 35% of the vape maker Juul Labs.

The FTC claims that Altria, seeing Juul as a significant competitor, has agreed to close its e-cigarette business in exchange for a stake in Juul, while using its position as a tobacco market leader to promote Juul products in US stores.

“Altria and Juul have turned from competitors into collaborators, abandoning competition and sharing Juul’s profits,” the FTC said in a statement.

In February this year, the Securities and Exchange Commission of the United States became interested in investigating the terms of the transaction Altria and Juul.

The US regulator believes that Altria has not fully described to its shareholders the risks that investments in a manufacturer of flavored electronic cigarettes bear. In particular, according to The Wall Street Journal, in January of this year, the company’s management withdrew $ 4.1 billion of its investments in Juul Labs.

At the same time, the publication notes that the cost of the vape manufacturer itself since the completion of the transaction (then it was about $ 38 billion) has decreased significantly.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.