Philip Morris, the biggest maker of tobacco cigarettes in the U.S., reportedly is in talks with Ruyan Group, which manufactured the original electronic cigarette in 2005, OfficalWire reported yesterday.
Now that the FDA has the authority to regulate the tobacco industry, Philip Morris could be looking to gain controlling interest over the products inside the U.S. and abroad. While rumors abound, the motives of the manufacturer are not clear at this time, but many speculate everything from shutting the industry down by acquiring the rights to possibly launching its own electronic cigarette product and taking it mainstream.
Quamnet.com reported on July 6 that “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.”
Rumors are flying high again because Ruyan Group’s stock trading was suspended on Nov. 2, pending an announcement on a price sensitive matter. The company’s stock also suddenly jumped 20%, which could be related to this. Ruyan Group’s stock soared back in June (more than 35%) after it was announced the manufacturer was negotiating with what Quamnet referred to as an “independent third party”. On July 6, Philip Morris was discovered to be the third party. Ruyan Group Co. also reportedly sold its office properties for HK$28.57 million to an undisclosed buyer on Oct. 23.