Marlboro maker Altria is spending $12.8 billion for a 35 percent stake in vape company Juul as one of the world's biggest tobacco companies tries to offset declining cigarette use.
Altria Group Inc. said Thursday its investment puts the value of privately held Juul Labs Inc. at $38 billion, about the same value investors placed on home rental startup Airbnb earlier this year.
Juul will remain an independent company and have access to Altria's infrastructure and services, the two sides said in their announcement.
Juul CEO Kevin Burns addressed the "skepticism that comes with an affiliation and partnership with the largest tobacco company in the US" while reiterating the vape brand's commitment to improving the lives of adult smokers by weaning them off of cigarettes.
Altria described the investment as a "significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes."
"We strongly believe that working with JUUL to accelerate its mission will have long-term benefits for adult smokers and our shareholders," the statement read.
The U.S. Food and Drug Administration is ramping up efforts to restrict the sale of flavored e-cigarettes which appeal largely to children.
Altria this month made a $1.8 billion investment in Canadian cannabis company Cronos Group as smokers increasingly turn to alternatives to tobacco cigarettes.