Altria, maker of Marlboro cigarettes, said it will provide global distribution for Burger Sohne's "On" nicotine pouches. Altria said it expects to complete the cash transaction in the second half of the year.
Altria formed a new subsidiary, Helix Innovations, which will be the parent company of the Burger Group subsidiaries currently manufacturing and selling On.
The Richmond, Virginia-based company said the On portfolio consists of seven flavors and five nicotine strengths for a total of 35 SKUs, all of which were available in the U.S. as of August 2016. On is currently available in limited distribution in several thousand U.S. retail outlets, and is available in Sweden and Japan and is also sold online.
Altria said sales of tobacco-derived nicotine grew to around $60 million in the U.S. in 2018, according to research firm IRL, up 250% from the previous year.
"Through our companies and investments, we have access to the leading products and brands in the moist smokeless tobacco, e-vapor and heated tobacco categories," Howard Willard, Altria's chairman and CEO. "This acquisition will add another non-combustible product to our portfolio in what we believe is a high-potential, rapidly developing oral TDN products category."
Shares of Altria were up slightly to $49.19.