Mubasher: Marlboro cigarette maker Altria on Thursday said it would buy a 35% stake in Juul Labs, in an alliance between the tobacco giant and the fast-growing electronic cigarette company.

The tobacco company would acquire the stake for $12.8 billion, while the deal values Juul, the market leader in e-cigarettes, at $38 billion, more than double $16 billion valuation in a July private funding round.

Under the terms of the agreement, Altria may not purchase more Juul shares above its current interest.

Moreover, it agreed not to sell or transfer any shares in the e-cigarette firm for six years from finalising the deal.

“We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes,” Altria’s CEO Howard Willard said in a statement.

Altria’s investment is expected to boost Juul’s distribution in convenience stores and other traditional retail channels.

The e-cigarette maker would reach Altria’s customers through advertisement in traditional packs of cigarettes and direct mailers to customers.

“Our success ultimately depends on our ability to get our product in the hands of adult smokers and out of the hands of youth,” Juul’s CEO Kevin Burns said in a statement.