If you can’t beat
them, join them.
Lorillard became the
first major tobacco maker to buy an electronic cigarette make yesterday,
announcing a $135 million acquisition of blu ecigs.
This follows news
this month that buyout firm Catterton Partners invested $20 million in rival
Soterra, which makes NJOY, to help it get in big box chains including Walmart.
In a statement, blu
ecigs, based in Charlotte, NC, said the sale “gives us access to the
tremendously experienced team and resources at Lorillard and will allow us to
move to the next level on our expansion.”
Electronic cigarettes, which typically have nicotine but no tobacco, are a roughly $500
million business in the US, but they are smoked by the $100 billion in revenue
generated by cigarettes, said Ray Story, head of the Tobacco Vapor Electronic
Cigarette Association.
But e-smokes are
much faster growing — which likely sparked the acquisition by Lorillard, maker
of Newport and Kent cigarettes.
Lorillard, the maker
of Newport brand cigs, saw its shares tumble 3.9 percent yesterday after it
reported first-quarter profit missed Wall Street estimates.
Profits were hurt by
a downturn in revenue and demand — something the company tied, in part, to the
downturn in the economy.
The company, in a
statement, said it was confident it could deliver “double digit total
shareholder return as measured by earnings per share growth and dividend yield”
— although some on Wall Street are skeptical.
At least now, to
help the country’s No. 3 cigarette maker from getting its ash kicked, it can
lean on its e-smokes operation to prop up revenue.
Shares in the
Greensboro, NC, company fell 3.9 percent, or $5.29, to at $129.53.
Article Credit: www.nypost.com
That's a crazy amount of money, but at least they are starting to switch and start getting into e cigs, instead of trying to ruin it in the media, I switched to e cigarettes about 3 years ago, and I swear its the best thing I have ever done. Nothing beats my eliquid and JFog 1453 kit.
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