FILE PHOTO: A hand with a cigarette is seen in front of displayed logos of Philip Morris and Altria in this picture illustration taken September 26, 2019. REUTERS/Dado Ruvic/Illustration
(Reuters) – Altria Inc (MO.N) took a $4.1 billion charge in the fourth quarter for its investment in Juul Labs Inc and said it was revising terms of the agreement with the embattled e-cigarette maker that includes restructuring Juul’s board.
The Marlboro maker has recorded $8.6 billion in impairment charges for the investment in 2019, reducing the value of the investment to $4.2 billion as of Dec. 31.
The company had purchased a 35% stake in Juul in December 2018 for $12.8 billion.
Altria said the charge in the fourth quarter was mainly for the increased number of legal cases pending against Juul and the expectation that the number will grow.
Altria said that upon antitrust clearance from the U.S. Federal Trade Commission, Juul will restructure its board to consist of two directors designated by Altria, three independent directors, the Juul chief executive and three directors designated by Juul stockholders other than Altria.
E-cigarette companies have been heavily scrutinized and has seen political backlash and regulatory bans following a surge in teenage vaping, clouding the future of these companies.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Bernard Orr