Altria Group (NYSE:MO) announced a new strategic partnership with Japan Tobacco (OTCPK:JAPAF) with a goal to pursue a global smoke-free partnership to accelerate harm reduction.
The companies plant to collaborate on product development and the global commercialization of smoke-free products. The partnership is expected to bring significant value to the respective businesses.
The two parties entered into a joint venture to market and commercialize heated tobacco sticks products in the U.S. with Ploom branded devices and Marlboro branded consumables. In addition, a a long-term, non-binding global memorandum of understanding to explore commercial opportunities for a wide range of potentially reduced-risk products was inked.
Altria (MO) will make an initial capital contribution of $150M to the joint venture.
"We believe Moving Beyond Smoking in the U.S. requires multiple FDA-authorized products within each smoke-free category to appeal to a diverse range of adult smokers."
"We believe that our joint venture and pipeline of heated tobacco products position us well to increase adoption of smoke-free products."
Shares of Altria Group (MO) traded flat in the premarket session on Thursday.