1,500 Juul staff to split $2B bonus from takeover — or $1.3M each
Juul Labs Inc. and Altria Group Inc. just did a deal that transforms them both: Juul, the e-cigarette maker, is now one of Silicon Valley’s most valuable privately held companies, and Altria, the tobacco giant, is relevant again for cigarette-averse Americans.
The Us$12.8-billion deal, which gives Altria a 35-per-cent stake, values San Francisco-based Juul at US$38 billion and will put its products next to Marlboro cigarettes on American retail shelves.
But the most eye-popping part of the deal is what staff of Juul will get. They are splitting a Us$2-billion bonus as part of the deal, according to a person familiar with the matter, who asked not to be identified because the details are private.
The company has about 1,500 employees, meaning the bonus works out to about US$1.3 million per person at the company, CNBC reported Thursday.
The money is part of a payment in Altria’s purchase of a 35-per-cent stake in Juul for US$12.8 billion. The deal valued the electronic cigarette startup at US$38 billion, making it one of the most highly valued startups in Silicon Valley.
The company decided to use part of the sum to pay the bonus to its staff, the person said. It wasn’t immediately clear how the money would be divided among the employees.
With smoking in decline, the deal furthers Altria’s push away from cigarettes and into higher-growth businesses. It comes on the heels of its investment in Toronto-based cannabis company Cronos Group Inc. earlier this month.
Altria also has a deal to market Philip Morris’s “heat not burn” device IQOS, already sold internationally, if it wins U.S. regulatory approval.
For Juul, the tie-up more than doubles its valuation from just a few months ago, when it was worth US$16 billion after Tiger Global Management led a US$1.2 billion investment. The Altria deal makes Juul more valuable than other closely held companies Airbnb Inc. or Elon Musk’s Spacex, though still less than Uber Technologies Inc.