Altria Group Inc. on June 3 said it will pay $372 million for an 80% stake in Swiss tobacco company Burger Söhne Holding AG to gain access to its On! oral nicotine pouches.
Burger's On! pouches are offered in seven flavors and five nicotine strengths. They have been sold in the U.S. since 2016 and are also available online and in Sweden and Japan.
Sales of tobacco-derived nicotine products such as On! totaled about $60 million, representing year-over-year growth of about 250%, according to Altria's release. About 20 million adult smokers in the U.S. are interested in tobacco products that are potentially less harmful, and more than 6 million are open to trying oral tobacco-derived nicotine products, the company said.
Altria will add the On! brand to its portfolio of noncombustible nicotine products and begin distributing them across the U.S. before the deal closes.
The tobacco giant expects the deal, which it will fund with cash on hand, to close in the second half of 2019.
On April 30, the U.S. Food and Drug Administration approved Altria and Philip Morris International Inc.'s application to sell the latter's electronic heated tobacco device in the country.