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The Wall Street Journal: Altria takes on Juul, Philip Morris in smoke-free tobacco

Marlboro maker Altria Group Inc. said it is forming a partnership with Japan Tobacco Group to develop and sell heated tobacco devices in the U.S. and abroad.

The move pits Altria
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against its former strategic partners, Philip Morris International Inc.
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and Juul Labs Inc., in the race to dominate the market for smoke-free tobacco products. It also gives Altria access to markets outside the U.S. Altria’s sales have been limited to the U.S. since it split from Philip Morris in 2008.

Also read: Altria and Juul end noncompete deal: Here’s what that means for e-cigarette sales and marketing.

Altria now plans to work with Japan Tobacco
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to market two new devices that heat tobacco but don’t burn it or produce smoke. One of the devices, owned by Japan Tobacco, heats tobacco sticks that resemble cigarettes. The other, owned by Altria, heats solid tobacco leaf contained inside a capsule or cartridge.

The companies will form a joint venture called Horizon Innovations to sell the tobacco stick product in the U.S. under the Marlboro brand, Altria said. Altria will have a 75% stake in the venture and Japan Tobacco will have a 25% stake, Altria said. Altria will make an initial capital contribution of $150 million. After that, the investments will be split according to the stakes.

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

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