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February 3rd, 2014:

Tobacco giant Altria buying e-cig maker Green Smoke

Big Tobacco expands its beachhead in the “vaping” business

Tobacco giant Altria Group, Inc., is buying the e-cigarette business of Green Smoke, Inc., for about $110 million, the latest in a series of moves by big tobacco companies to stake a claim in the electronic cigarette business.

It also is the latest example of Big Tobacco’s strategy to re-christen e-cigs as “e-vapor” products, in an effort to escape some of the stigma associated with cigarettes. The corporatespeak apparatchiks also prefer the verb “vaping” as opposed to “smoking.”

“Nu Mark’s entry into the e-vapor category with its MarkTen product was an important development in Altria’s innovation strategy. Adding Green Smoke’s significant e-vapor expertise and experience, along with its supply chain, product lines and customer service, will complement Nu Mark’s capabilities and enhance its competitive position,” said Marty Barrington, Altria’s Chairman and CEO.

Green Smoke was founded in 2008 and has operations in the United States and Israel. Green Smoke has sold e-cigs since 2009, mostly in the U.S. Green Smoke’s product lines, which are sold under the Green Smoke e-vapor brand, include both rechargeable and disposable versions.

Up in smoke

Tobacco companies have faced declining sales in the U.S. for years although sales remain strong in some international markets. Altria, based in Richmond, Va., has increased market share for Marlboro and some of its other brands through aggressive pricing.

Altria said last year that it would seek an entry into the e-cigarette business was it became clear that the electroinc devices were beginning to erode sales of traditional cigarettes.

Other major tobacco companies have also gotten into the e-vapor business. Lorillard, which makes Newport cigarettes, bought the blu e-cig brand in 2012. It is currently the top e-cig seller in the U.S. Reynolds, which makes Camels, launched its Vuse brand last year.

E-cigs work by heating nicotine-laced liquir into vapor. Their adherents say they are more healthful than tobacco products and can be an aid to those trying to quit smoking. Critics say they encourage smoking and charge that their health effects are unknown.

The Food and Drug Administration (FDA) has for years been saying that it is about to issue regulations for e-cigarettes but has not yet done so, leaving them unregulated except in a few cities where their public use has been outlawed.