Altria in negotiations to acquire a stake in Juul

Altria, the company behind the Marlboro cigarettes, is in talks to take a stake in Juul Labs, the $ 16 billion e-cigarette start-up that has seized three-quarters of the US vaping market since its launch in 2015, according to four people informed of the discussions.

The talks come after the US Food and Drug Administration has recommended taking drastic action to quell what it has called a "vaping epidemic" of minors.

Both companies have had intermittent interviews for several months, added a person close to Altria. The latest negotiations took place after the FDA's surprise visit to Juul Labs last month.

The cigarette maker has the support of several key investors for reaching an agreement allowing it to eventually control Juul, said two people.

An agreement will only be reached if Altria has a way to control, said a person who had spoken to several big investors of the tobacco company.

A spokesman for Juul declined to comment. An Altria spokesman said the company had not commented on "rumors and speculation".

Wells Fargo analysts estimate that ecigarette sales in the United States increased from $ 2.5 billion in 2012 to $ 4.4 billion in 2017 and are expected to reach $ 5.5 billion this year. Traditional tobacco companies have invested billions of dollars in finding alternatives to fuel cigarettes, but their share of the new market has diminished as Juul grows.

Analysts are closely studying data suggesting a recent decline in tobacco sales to understand whether it is a sign of lasting change. Bonnie Herzog, of Wells Fargo, said Tuesday that she was "disappointed and somewhat mystified" by the magnitude of the 8.7% drop in cigarette volumes reported in Nielsen's latest weekly data. Marlboro's trends showed signs of stabilization, she added.

The same data showed a 197% increase in electronic cigarette volumes, led by Juul, which now boasts a 76.1% market share.

After the announcement of the discussions, Ms Herzog welcomed the prospect of an agreement. Altria estimated that she could afford to spend between $ 4 and $ 7 billion for a 30 to 40% stake.

Juul could "complement Altria's risk-reduced strategy" and give it exposure to outside markets in the US, said the seasoned tobacco analyst, while Altria could help Juul overcome regulatory challenges and "catapulting" its international growth.

Juul, with about 1,000 people, accounted for $ 16 billion during a round of financing this summer that was attended by investors such as Tiger Global, the hedge fund and the New York venture capital investor. According to investors, regulators and consumers, its products are a much more effective way for the world's 1 billion smokers to replace combustible cigarettes, responsible for 8 million deaths a year.

Juul has taken steps to get ahead of the FDA's crackdown on ecigarettes by pulling sales of nicotine flavors into more than 90,000 convenience stores, closing its social networking accounts and incorporating Bluetooth technology to help find out where its devices are sold.

Analysts have estimated that restricting flavors, such as mango, to online sales and stores that can verify that customers were at least 21 years old could affect half of Juul's sales, but it is not yet clear whether consumers will switch to menthol, tobacco and mint. electronic cigarettes that remain widely available, or look to the online purchase of Juul flavored products.

The Wall Street Journal reported the discussions earlier in the day.