Marlboro-maker Altria takes stake in Juul e-cigarette firm
Marlboro cigarette maker Altria is buying a $12.8bn (£10bn) minority stake in vaping company Juul Labs.
The marriage between a traditional tobacco giant and Juul underlines how the fast-growing e-cigarette is changing tastes among smokers.
Altria said in a statement the move was preparation "for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes".
Altria is buying 35% of San Francisco-based Juul, valuing it at £38bn.
When Juul raised money from private investors in July, the funding valued the company at about $16bn. Juul was founded only three years ago.
The company is the US market leader in e-cigarettes, and the Altria deal is expected to give it more prominent distribution in convenience stores and other traditional retail channels.
It is also possible that Juul will be able to tap into Altria's years of lobbying expertise in Washington at a time when e-cigarettes are coming under greater health scrutiny.
Juul has boosted its lobbying spending throughout this year, spending $890,000 so far, according to the Center for Responsive Politics.
However, that is dwarfed by Altria's spending of more than $7m this year, making it the biggest spender in the US tobacco industry.
Last month, in another diversification away from its traditional products, Altria made a $1.8bn investment in a Canadian cannabis producer, Cronos.
E-cigarettes heat a liquid to generate a vapour. Juul's devices, which look like a USB flash drive, grew from 13.6% of the market in early 2017 to more than 75% this month, according to a Wells Fargo analysis of Nielsen retail data.
There has been concern about the popularity of vaping among young people. Last month, the US Food and Drug Administration announced new curbs on sales of flavoured e-cigarette products, including Juul's mango and cool cucumber.
Earlier this month Altria, whose Marlboro Man branding was once a symbol of tobacco's popularity, said it would discontinue some of its own e-cigarette brands.