Altria Group, Inc. (NYSE: MO) on Monday announced it will buy 80% of Swiss tobacco company Burger Söhne in a USD 372 Million deal.
In an effort to further expand its portfolio beyond traditional cigarettes, Altria will provide worldwide distribution for Burger Sohne’s oral nicotine pouches, on!. The pouch, which comes in a variety of flavors, is similar to chewing tobacco- minus the tobacco. Burger Sohne’s products are currently available in several thousand U.S. retail outlets, as well as online in Sweden and Japan.
Upon completion of the all-cash deal later this year, Altria’s subsidiary, Helix Innovations LLC, will be the parent company of the Burger Group subsidiaries currently manufacturing and selling On.
Altria, the maker of Marlboro, is noticing a shift in consumer preferences. It said 20 million adult smokers in the U.S. are interested in less-harmful tobacco products, and more than six million adult tobacco consumers are open to trying oral tobacco-derived products like Burger Sohne’s on!. “This acquisition will add another non-combustible product to our portfolio in what we believe is a high-potential, rapidly-developing oral products category,” said Altria CEO Howard Willard. The Company reported sales of tobacco-derived nicotine grew to around USD 60 Million in the U.S. in 2018, up 250% from a year earlier.
“We’re excited to put our resources behind on! and participate in what we expect to be a fast-growing category. Combining our deep understanding of adult tobacco consumers and Altria’s best-in-class sales and distribution infrastructure, we expect to drive the on! brand toward sustainable, long-term leadership,” said Allison Bolyard, Senior Director and General Manager of Helix Innovations.