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Lorillard Buys Second E-Cigarette Business in As Many Years

Lorillard (NYSE: LO  ) is placing more chips on the market for electronic cigarettes this week.

In its second big buy in as many years, Lorillard announced Tuesday that it agreed to buy U.K. e-cigarette maker SKYCIG for $48.6 million, plus up to $48.6 million more that may be paid in 2016 "based on the achievement of certain financial performance benchmarks." Lorillard already owns the leading U.S. e-cigarette brand, Blue Cigs, which it bought for $135 million last year. Now, the company says it's positioned with a "significant European presence in the e-cigarette market" as well.

Lorillard says its mission is "to be first and best in the electronic cigarette category." In a simultaneous statement, SKYCIG co-founder Tom Rolfe noted that his company is "the best and the most widely available e-cigarette brand in the U.K." SKYCIG will continue to operate independently and maintain a separate brand from Lorillard, which, in addition to its new e-cig ventures, is the third largest U.S. cigarette company.

E-cigarettes are gaining popularity as an alternative to traditional "analog" cigarettes among smokers, and among people trying to quit smoking as well. Battery-operated, e-cigs often look like real cigarettes, but they operate by heating a nicotine solution (sometimes referred to as "smoke juice") into vapor form, at which point it can be inhaled and exhaled much like tobacco smoke -- but with fewer harmful chemicals.

At present, Lorillard is the only major tobacco company with a significant presence in the e-cig market.

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  • Report this Comment On October 02, 2013, at 2:37 AM, JohnWade304 wrote:

    Tobacco companies are starting to buy out these e-cigg and <a href="">vape pen</a> companies beacuse they are starting to lose a huge market share to this new techology. So as a backup plan if they cannot successfully lobby in Congress to get it banned, they need to enter into this new niche product. This is a good move as it lowers risk overall for the company.

    Shah Paracha

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