Juul Labs, of which Altria Group Inc owns a 35% stake, has been the recipient of incessant criticism and accusations of being a major contributor to the surge of teen vaping in the US. PMI who was holding talks with Altria about a possible $187 billion merger, grew concerned about the regulatory risks surrounding Juul.
Juul will be replacing Burns with K.C. Crosthwaite, who’s most recent post was that of chief strategy and growth officer at Altria.
To this effect and also due the fact that its investors were less than thrilled about the possible merger, PMI terminated the discussions and announced that it will instead focus on the joint launch of tobacco-heating product iQOS in the US.
The merger between these two tobacco companies, would have reunited them a decade after their split and created a tobacco giant with a combined market value of $187 billion, triple its closest competitor, British American Tobacco Plc .
Last week at the Global Tobacco and Nicotine Forum in Washington, CEO of Altria, Howard Willard, pointed out that that vaping is an essential component of harm reduction amongst smokers. “We must acknowledge … vaping is at an inflection point,” he said, adding that tobacco companies need to differentiate and educate the public about the relative risks of smoking and vaping.
New Juul CEO is a big tobacco veteran
Meanwhile, Juul has announced that it will be replacing CEO Kevin Burns with K.C. Crosthwaite, a Philip Morris USA veteran. An article on Reuters pointed out that given the fact that Crosthwaite’s most recent post was that of chief strategy and growth officer at Altria, his promotion to CEO of Juul is indicative of Altria’s growing influence over Juul.
Burns on the other hand, a former private equity executive who had joined Juul in 2017, has led the company as it transformed from a 300-person startup to an international operation employing thousands.