As forecast, the Merger and Acquisition trend which we have been long reporting would peak when the Federal Reserve would aggressively raise interest rates and cut off the cheap money supply, has indeed peaked. Indeed, they “slowed to a trickle”… and here are the latest “trickles.”

APOLLO WANTS TO BUY ARCONIC

Private equity giant Apollo Global Management is in discussions to buy Arconic Corp., which makes parts for aerospace, auto, building, and energy companies, The Wall Street Journal reported.

Apollo made a bid last month and has arranged loans to cover the cost of the deal, the WSJ said.

On the news, Arconic’s share price shot up 19.5 percent on 28 February, closing at $26.44, valuing the company at about $2.6 billion.

Arconic also is carrying about $1.5 billion in debt.

The company reported fourth-quarter revenue of $1.9 billion, down 9 percent year on year, and a net loss of $238 million for 2022, compared to a loss of $38 million a year previous. 

Apollo first showed interest in Arconic in 2018, making a bid of about $10 billion. After the deal fell through, Arconic separated a part of itself that was renamed Howmet Aerospace Inc.

ALTRIA BUYS E-CIGARETTE COMPANY FOR $2.8 BILLION

Altria, maker of Marlboro, Benson & Hedges, and other iconic cigarettes, has agreed to buy vape company NJOY for about $2.8 billion.

NJOY makes ACE, the only pod vapor product authorized by the U.S. Food and Drug Administration. The company also makes five other vaping products that have been approved by the FDA for sale. 

Few vaping companies have received such regulatory approval.

Altria’s investment in NJOY includes $500 million in cash payments that depend on the company’s products passing certain other regulatory milestones. 

“We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY ACE in ways that NJOY could not as a stand-alone company,” Altria CEO Billy Gifford said in a statement announcing the deal.

In 2018, Altria had bought into Juul Labs, maker of a leading vape company valued at $12.8 billion. After thousands of lawsuits complaining that Juul deliberately marketed to minors, Altria’s piece of the company is now worth around $250 million, Reuters reported.

In mid-January, Juul still had more than 5,000 lawsuits pending against it. Also that month, a judge in California approved a $255-million settlement of a class action suit against Juul. Juul flirted with bankruptcy last November.

Altria’s exposure in the lawsuits is not publicly known.

PUBLISHER’S NOTE: Altria’s current tagline is “Moving Beyond Smoking.” The company did not explain how buying a vaping company achieves that goal.