Monday, August 19, 2019

Monday, August 19, 2019

ALTRIA: Enters Growing Oral Nicotine Products Category with on! Pouch Product


Altria issued the following announcement on June 3.

Altria Group, Inc. (Altria) (NYSE:MO) today announces that it has entered into definitive agreements with the shareholders of Burger Söhne Holding AG (the “Burger Group”), based inof the Burger Group that will commercialize on! products worldwide. on! is an oral tobacco-derived nicotine (TDN) pouch product. Switzerland, to acquire 80% ownership of certain companies 

“We’re excited to add on! to our companies’ terrific non-combustible portfolio”

“We’re excited to add on! to our companies’ terrific non-combustible portfolio,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “Through our companies and investments, we have access to the leading products and brands in the moist smokeless tobacco, e-vapor and heated tobacco categories. This acquisition will add another non-combustible product to our portfolio in what we believe is a high-potential, rapidly-developing oral TDN products category.”

Upon closing, Altria will invest $372 million for an 80% ownership interest in the global business. Altria expects to complete the transaction in the second half of 2019, subject to customary closing conditions, and to finance the transaction with available cash.

About on!

on! is a nicotine pouch in the oral TDN category. The broad on! portfolio consists of seven flavors and five nicotine strengths for a total of 35 SKUs, all of which were available for sale in the U.S. market as of August 8, 2016. on! is currently available in limited distribution in several thousand U.S. retail outlets, is available in Sweden and Japan and is also sold via e-commerce.

Additional Transaction Details

Altria formed a new subsidiary, Helix Innovations LLC (“Helix”), that upon closing, will be the parent company of the Burger Group subsidiaries currently manufacturing and selling on!.

The parties have also entered into an agreement under which Altria will distribute on! across the U.S. in advance of the transaction closing, which we expect will allow Altria to quickly expand retail distribution.

According to IRI, in 2018, sales of TDN products grew to around $60 million in the U.S., demonstrating approximately 250% growth compared to 2017. Approximately 20 million adult smokers in the U.S. are interested in tobacco products that offer reduced-harm potential and, specifically, more than six million adult tobacco consumers are open to trying oral TDN products.

“We’re excited to put our resources behind on! and participate in what we expect to be a fast-growing category. Combining our deep understanding of adult tobacco consumers and Altria’s best-in-class sales and distribution infrastructure, we expect to drive the on! brand toward sustainable, long-term leadership,” said Allison Bolyard, Senior Director and General Manager of Helix.

Original source can be found here

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