By Dean Seal
Altria Group has completed its acquisition of vaping pioneer NJOY Holdings after receiving antitrust clearance for the $2.75 billion deal.
Altria Chief Executive Billy Gifford said Thursday that the Marlboro maker will lower its earnings guidance for the year to make way for planned investments behind the U.S. commercialization of NJOY's pod-based e-cigarette brand ACE.
The completion of the all-cash deal struck earlier this year advances Altria's plan to shift its business toward less-harmful products. America's biggest cigarette company has been building out a new line of e-cigarettes while divesting its stake in the troubled Juul Labs in March.
Altria agreed that same month to buy NJOY, one of the few e-cigarette makers whose products have clearance from federal regulators, in a transaction that includes an additional $500 million if the Food and Drug Administration authorizes additional NJOY products.
The $2.75 billion acquisition price was funded through a $2 billion loan, along with commercial paper and available cash, Altria said Thursday.
Altria is expecting the transaction to be accretive to cash flow starting in 2025 and to start boosting adjusted earnings in 2026.
The company said it now expects adjusted earnings of $4.89 to $5.03 a share for the year, down slightly from its previous range of $4.98 to $5.13 a share. The updated outlook includes about $50 million in estimated amortization charges tied to intangible assets acquired in the deal.
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(END) Dow Jones Newswires