Philip Morris International (PMI) has called off talks about a US$200 billion merger with Altria Group, Inc.
Reportedly, PMI’s decision came after it became apparent the US government crackdown on vaping could have a negative impact given Altria’s stake in Juul Labs, in which Altria has a 35% stake. On September 25, Juul announced its c.e.o, Kevin Burns, was stepping down and K.C. Crosthwaite, Altria’s chief strategy and growth officer, was replacing him, effective immediately.
Altria c.e.o, Howard Willard, said, "This is a pivotal moment for the industry and strong leadership and action are urgently needed. I've worked closely with K.C. at Altria for many years and am confident in his leadership and integrity and that he will help Juul urgently confront and reduce underage vaping.”
Juul also announced that it would be suspending all advertising in the US. Sources said that the changes at Juul were meant to reassure PMI that Altria had things under control, especially going through tightened regulations.It is expected that both PMI and Altria will pursue a deal at a later stage.