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Dec. 20, 2018, 10:02 a.m. EST

Altria takes $13 billion stake in e-cigarette maker Juul

Juul says the partnership ‘could help accelerate our success switching adult smokers’

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By Allison Prang

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Altria Group Inc. said Thursday it invested $12.8 billion in cash in Juul Labs Inc., giving it a 35% stake in the e-cigarette firm and helping add to its portfolio outside of regular cigarettes.

The cash investment values Juul at about $38 billion, pushing the closely held company’s valuation past other startups such as Pinterest Inc. and Elon Musk’s Space Exploration Technologies Corp. Altria /zigman2/quotes/208895754/composite MO +1.77% said Juul will stay completely independent.

The Wall Street Journal reported Wednesday that Altria was getting close to a deal with Juul.

“We understand the controversy and skepticism that comes with an affiliation and partnership with the largest tobacco company in the U.S.,” Juul Chief Executive Kevin Burns said in a written statement Thursday. “We were skeptical as well. But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers.”

Altria Chief Executive Howard Willard said the Juul investment is about preparing for a time when people choose noncombustible products over cigarettes, calling Juul a leader in switching adult smokers.

—Jennifer Maloney and Dana Mattoli contributed to this article.

An expanded version of this report appears at WSJ.com .

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