Altria Invests USD 372 Million in Oral Nicotine Pouch Brand

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.

3 Comments
  1. Timothy Torres 4 months ago
    Reply

    Another expensive transaction for $MO: paying $372mln for 80% ownership for certain subsidiaries of Burger Sohne group (of Switzerland) that market On! nicotine pouches in the US among other countries. A couple of things stand out…

  2. Glenn Usher 4 months ago
    Reply

    $CRON is now a $MO (Altria) branch they make 6 billions QR … they own 45% and soon will increase to 55% Money , sales and contact are not a problem.. let just US laws unfold and we shell see IMO

  3. Nathan Michaud 4 months ago
    Reply

    $MO yields going ALOT lower..IQOS coming dividend 6/13 BOTTOM IN! No China exposure

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