Philip Morris International has struck a $16bn deal to buy Swedish Match, as the tobacco company makes its biggest bet yet on alternatives to cigarettes.

Swedish Match is a leader in snus, a popular tobacco product in Scandinavia, and oral nicotine pouches, which are the fastest-growing alternative nicotine category.

The Stockholm-based company’s Zyn product is the largest nicotine pouch brand in the US, increasing the appeal of the deal for PMI, which has lacked a significant presence in America for more than a decade. Sales of Swedish Match’s pouches grew more than 50 per cent last year in the US and Scandinavia.

Emmanuel Babeau, PMI’s chief financial officer, told the Financial Times: “We’re ticking a number of very important strategic boxes: we are the leading player in [heated tobacco] and we are proposing to acquire a leading player in a new category: nicotine pouches.”

Marlboro maker PMI will pay SKr106 ($10.57) per share for Swedish Match, a premium of 39 per cent to the closing share price on May 9, before talks between the companies became public.

The board of Swedish Match, which has net debt of about $1.3bn, has recommended that its shareholders accept the offer.

Swedish Match’s chair Conny Karlsson said the company had not discussed a potential deal with other businesses. Asked whether he expected a counter bid, Karlsson said: “Now that it’s out in the open . . . I don’t know what other people will do.”

Shares in Swedish Match are up more than a third since Monday, when news that a deal was close first broke, sitting at SKr103.50 in afternoon trading in Stockholm on Wednesday.

Jonathan Fell, a partner at investment house Ash Park Capital, which owns PMI shares, said the “US push opportunity” was a principal motivation for the acquisition.

PMI, which has its headquarters in Switzerland and is listed in New York, traces its roots to 2008 when US-based Altria spun off its international business. Its largest smoke-free product is the heated tobacco device IQOS, which Altria sells in the US but is currently banned from doing so due to a patent dispute with rival RJ Reynolds.

Babeau said of the dispute: “The agreement we have with Altria is no longer workable. We need to negotiate with them.”

PMI could use Swedish Match’s distribution channels to market its own reduced-risk products in the US. “I don’t think people should be surprised,” he added. “[Altria and PMI] are two different entities and it’s quite normal they can compete.”

PMI has been the most aggressive among traditional cigarette companies in its bid to gain market share in so-called new-generation products, including vapes and heated tobacco devices.

Its push to reinvent itself and “unsmoke the world” has proved controversial, with a £1bn deal to buy Vectura, a UK-based developer of asthma inhalers, prompting fierce criticism.

PMI aims for the majority of its net revenues to come from cigarette alternatives by 2025, saying it was on track to do so before the acquisition. But Babeau did not rule out further deals to boost the group’s reduced-risk portfolio: “There’s a difference between what’s needed and what’s great to do.”

PMI will not revive aborted plans by Swedish Match to unwind its cigar business. Swedish Match announced that it would sell off the unit in September 2021 but suspended the process in March.

John Hempton, founder of Bronte Capital, is among those shareholders who have criticised Swedish Match for not having used its position in oral tobacco, as well as its global distribution channels for matches and lighters, to launch other smoke-free products.

He wrote in a blog post before the deal was announced that he was “furious” about the sale and called for “an overbid”.

Karlsson said Swedish Match’s distribution network would “not have been able to execute on that type of an expansion”, adding that the company had wanted to focus on oral tobacco “instead of splitting our resources”.

PMI said its plans “do not include any material changes” to Swedish Match’s operations.