Philip Morris International Inc is currently in negotiations for acquiring rival Swedish Match AB, as the Marlboro producer aims to expand its smoke-free options despite growing global scrutiny of traditional cigarette sales, according to statements issued by the companies.

The businesses were in talks, but it was unclear whether they would make an offer, Philip Morris said in a separate statement. The company’s stock was trading at $100.53, up 1.6 per cent.

According to Refinitiv statistics, Swedish Match had a market capitalisation of 120.92 billion Swedish krona ($12 billion) as of last closing. Philip Morris has a $153.37 billion market capitalization.

Philip Morris paid $1.44 billion buying asthma inhaler firm Vectura last year as part of a long-term strategy to develop smoke-free products and transition to a “broader healthcare and wellness” company.

In April, the US Food and Drug Administration proposed banning flavoured cigars and menthol cigarettes, which account for more than a third of the industry’s overall market share in the US.

Snus, a wet snuff product made by Swedish Match, is illegal in all European Union nations save Sweden. The company has seen recent success in the US cigar market and expects to have comparable success with snus, which confronts competition in its own market.

The Wall Street Journal originally reported on Monday that talks between the Marlboro producer and Swedish Match might result in a merger as soon as this week, valued at $15 billion or more, citing people familiar with the subject.

The reported offer undervalues the goal, according to Bronte Capital, which owns 15.1 million Swedish Match shares, or around 1 per cent of the firm.

“We believe the future for Swedish Match is considerably better than the price reflected and we are not happy with this offer,” it said in a statement, adding that it would consider its future actions.

Swedish Match put plans to spin off and IPO its U.S. cigar company on hold in March.

(Adapted from Bloomberg.com)