Altria cuts Juul value by $4.5 bn amid vaping crisis
US tobacco merchant Altria said Thursday it was writing down its stake in e-cigarette start-up Juul Labs by a third, or $4.5 billion, as that company contends with a regulatory backlash.
Altria also disclosed Thursday that US anti-trust regulators were probing the company's role in the departure last month of Juul's CEO, who was replaced by an Altria executive.
The company said no single "determinative event or factor" prompted the change in Juul's value.
The e-cigarette maker faces a host of problems, including mounting chances US regulators could provisionally block the sale of all flavored e-vapor products, according to Altria, which booked the charge in its third-quarter results.
Altria in late 2018 invested about $13 billion in the San Francisco-based Juul, taking a one-third stake in the startup.
As Juul moved last month to respond to the crisis, it said CEO Kevin Burns would step down and be replaced by top Altria executive KC Crosthwaite.
In its quarterly report, Altria said that, during an anti-trust probe, the Federal Trade Commission had demanded information about Burns's departure "and the hiring by Juul of any current of former" Altria executive, director employee.
With dozens dead and hundreds sickened from causes potentially tied to some vaping products, the regulatory landscape for e-cigarettes has sharply deteriorated this year.
Juul's slender electronic devices proved popular, particularly with teenagers, and offered alluring candy flavors.
State and federal authorities have brought litigation and reportedly at least one criminal investigation.
The company announced this month it had suspended sales of un-mentholated flavored Juul pods in the United States.
However, in nearly 80 percent of cases, those sickened had used pods containing THC, the psychoactive ingredient in cannabis, which were not manufactured by the company.
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