NEW YORK (AP) — Philip Morris will attempt to step further into the smoke-free tobacco market, offering to buy the chewing tobacco company Swedish Match for about $16 billion in cash.

Philip Morris is offering $10.62 (106 Swedish krona) for each share of Swedish Match, a premium of about 39% to its closing price Monday before the potential deal was first reported in The Wall Street Journal.

Swedish Match, based in Stockholm, makes nicotine pouches, chewing tobacco and moist snuff, among other products. It derives more than 65% of its sales from smoke-free products, with most taking place in the U.S. and Scandinavia.

As recently as 2015, all of Philip Morris’ revenue came from cigarettes. By last year, however, the New York company said that about 30% of its revenue came from smoke-free products. It sells Marlboro cigarettes outside the U.S. while its former parent, Altria, sells the product domestically.

Philip Morris’ goal is to be predominantly smoke-free by 2025.

“Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion—strengthened by complementary geographic footprints, commercial capabilities and product portfolios—and open up significant platforms for growth in the U.S. and internationally,” said CEO Jacek Olczak.

The offer is subject to approval by Swedish Match shareholders and other conditions.

In premarket trading, shares of Philip Morris International Inc. edged up 1% to $99.87.


This story has been updated to remove a photo of Philip Morris USA, which is not affiliated with Philip Morris International.