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What many e-cigarette users have feared from day one could be in the works: Philip Morris, the biggest maker of tobacco cigarettes in the United States, has been discovered to be in negotiations with Ruyan Group, which manufactured the original e-cigarette starting in 2005. A short news article on Quamnet.com states the seriousness of the matter:
“Ruyan Group said that an agreement between the Company and Philip Morris International Management S.A. could not be reached on matters relating to the co-operation between them on its “electronic cigarettes” by the end of the first and exclusive phase of negotiations.”
As the Food and Drug Administration has recently been given authority over the tobacco industry, the move by Philip Morris could be a carefully calculated move to gain controlling interest over the products inside the United States and abroad. The motives of the company are unclear at this point, but speculations include everything from wanting to shut the industry down by acquiring the rights to it all the way to possibly launching its own e-cigarette product and taking it mainstream.
Ruyan Group's stock trading was suspended on November 2nd pending an announcement on a price sensitive matter. This could be related to a sudden 20% jump in the company's stock price.
But, that isn't the first time Ruyan Group's stock has soared. Back in June, the stock rose over 35% after the announcement that the Company was negotiating with what Quamnet called an “independent third party”. Shortly afterward on July 6th, that third party became known to be Philip Morris.
In related news, Ruyan Group also sold their office properties for HK$28.57 million to an undisclosed buyer on October 23rd.
What this could mean for the e-cigarette industry both in the United States and internationally is uncertain, but what's clear is this: Philip Morris wants in.
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