The third largest tobacco company in the United States, Lorillard, purchased the British electronic cigarette company, SKYCIG during the past week. Lorillard produces Newports, the second highest selling brand in the U.S. Lorillard also produces cigarette brands Kent, True, Maverick, and Old Gold. SKYCIG was purchased for 30 million pounds, or about $49 million.
The company says that they want to expand their global presence in the electronic cigarette business. The company had previously purchased Blu E-cigs last year for $135 million. Many tobacco companies are jumping on the e-cig bandwagon. Electronic cigarette usage has increased from a few thousand in 2006 to several million users worldwide. Electronic cigarettes are most commonly used to quit a cigarette smoking habit, so tobacco companies have been majorly impacted. Lorillard reasons that diversifying from traditional cigarettes into electronic cigarettes may help to keep the company growing and expanding into new regions.
Electronic Cigarettes
Electronic cigarettes work by heating up a flavored liquid to produce a vapor. This vapor is then inhaled, like smoke, and exhaled. Electronic cigarettes have not been around long enough to test long-term safety of inhaling the vapor, but it usually has far less chemical additives and carcinogens than a traditional cigarette. The liquid that goes into electronic cigarettes can be customized, and can have nicotine or not. It can also be flavored, which is attracting some customers that weren’t cigarette smokers to begin with. The cigarette itself can come in a variety of styles, so some users are going for the fashion of the product.