Tobacco giant Philip Morris has called off talks of an impending merger with Altria, the companies said Wednesday, amid the nationwide crackdown on vaping products and electronic cigarettes.
Instead, the companies said they will focus on launching IQOS, the “heat not burn” tobacco product from Philip Morris.
“After much deliberation, the companies have agreed to focus on launching IQOS in the U.S. as part of their mutual interest to achieve a smoke-free future,” André Calantzopoulos, CEO of Philip Morris International, said in a statement.
{mosads}The abandonment of the potential $200 billion merger comes as e-cigarettes are facing increasing regulatory scrutiny and companies are struggling with how to move forward.
Philip Morris has said it hopes to no longer sell traditional cigarettes, and will rely on smokeless tobacco products like the IQOS. IQOS heats a stick of tobacco, rather than burning it, setting it apart from vaping products such as Juul.
E-cigarettes utilize a nicotine-laced liquid that allows users to inhale much stronger levels of nicotine and tobacco than a traditional cigarette.
Altria owns a 35 percent stake in Juul.
Separately on Wednesday, Juul CEO Kevin Burns said he was stepping down, to be replaced by an Altria executive.
The companies announced in late August they were considering a merger. Philip Morris separated from Altria in 2007.