(MO.N) in a US$12.8 billion deal that turns the e-cigarette maker into one of Silicon Valley's most valuable privately held companies.
"Altria's interests are served by maximizing sales and profits from both the cigarette and e-cigarette markets, and they have every reason to push Juul to market its products in a way that does the least damage to the cigarette market".
Juul CEO Kevin Burns addressed the "skepticism that comes with an affiliation and partnership with the largest tobacco company in the US" while reiterating the vape brand's commitment to improving the lives of adult smokers by weaning them off of cigarettes.
He said the company ultimately was convinced the deal could "help accelerate our success switching adult smokers".
There is a scramble in the U.S.to reverse a recent explosion in teen vaping that public health officials fear could undermine decades of declines in tobacco use.
The deal was seen by some as a betrayal of the startup's mission to eliminate the use of combustible tobacco and provide smokers worldwide a true, less-harmful alternative to cigarettes, although the company's own research shows its device has hooked people who had never smoked or had quit smoking.
Last month, in another diversification away from its traditional products, Altria made a $1.8bn investment in a Canadian cannabis producer, Cronos. Altria has also agreed not to sell or transfer any Juul shares for six years from the closing of the deal. The US-based company has captured 75 percent of the e-cigarette market, with expansion plans targeting Europe and Asia.
Altria is taking out $14.6 billion in debt to finance the deal, and said Thursday they'd also reduce spending and will cut an unknown amount of jobs.
Youth consumption of e-cigarettes "is a big problem that needs to be resolved and if it's not resolved, it's going to put the whole category at risk, including for adults", he said. Altria also has a deal to market Philip Morris's "heat not burn" device IQOS, already sold internationally, if it wins US regulatory approval.
Altria on Thursday also announced a cost-cutting program that includes workforce reductions and reduced third-party spending, to save $500 million to $600 million annually by the end of 2019.
Multiple reports suggested that some Juul employees have been upset about the rumored Altria investment.