Just yesterday, Altria announced the agreement to acquire electronic cigarette company Green Smoke. Altria also happens to be 100% full owner of Phillip Morris, which is considered to be one of the three ‘Big Tobacco’ companies in the US. Phillip Morris is the maker of Marlboro,Virginia Slims, Parliament and other tobacco cigarette brands.
The acquisition is happening through Altria’s electronic cigarette subsidiary Nu Mark LLC. The purchase will ring in with a $110 million price tag (plus up to $20 million in bonus incentives for retained management).
Jumping on the bandwagon and because the adult smoking rate has been on a steady decline, Altria created the Nu Mark company and then came the Mark Ten e-cigarette. However, activity wasn’t as expected, so what does a Big Tobacco company do? – They purchase an already established electronic cigarette company by flashing the large bills. The purchase of Green Smoke is the second major purchase of an electronic cigarette company by a major US-based tobacco company. The first being Blu Cigs by Lorillard in April of 2012 for around $135 million.
Green Smoke itself is one of the earlier e-cig companies to jump into the market and start growing rapidly. It started in 2008 and its sales for 2013 were in the neighborhood of $40 million. The purchase is expected to complete in the second quarter of this year.
Credits to Ecig Advanced for the share.
I’m not pleased that yet another Tobacco Giant has bought out an already established electronic cigarette company. This goes to show you that they’re going to make their way into every vapers hands by continually purchasing these e-cigarette companies. The sad thing is, Big Tobacco is targeting the weak and more commercialized companies that are more prone to throwing in the towel. It makes you wonder which company will be next and what other companies are so easily swayed to hand over the industry to them.
Another thing that gets me is… Green Smoke could have continued business as normal for another year or two and seen the same amount of money. Why sell out to Big Tobacco for such a small price?