Shares of tobacco giants Philip Morris International (PM - Get Report)  and Altria Group  (MO - Get Report)  both fell on Tuesday after the two rivals confirmed they are in discussions over a potential all-stock deal as traditional tobacco smoking across the globe declines.

Philip Morris confirmed in a statement on Tuesday that it is in discussions with its former partner, noting there is "no assurance that any agreement or transaction will result from these discussions. Additionally, there can be no assurance that if an agreement is reached, that a transaction will be completed."

A merger would reunite Philip Morris International and Altria more than a decade after the two companies split.

Altria spun off Philip Morris in 2008 and has remained a largely U.S.-focused company, selling Marlboro cigarettes domestically, while Philip Morris has focused on selling cigarettes overseas. Both companies have also dabbled in e-cigarettes and other non-combustable tobacco products as global tobacco sales have tapered off.  

Our companies include some of the most enduring names in American business: Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton, Nat Sherman and Ste. Michelle Wine Estates. Learn more: https://t.co/Gb0kJgM5BY pic.twitter.com/gElZvsbjG0

— Altria (@AltriaNews) August 19, 2019

Altria in particular has been moving to diversify away from cigarettes and tobacco products, earlier this year investing $1.8 billion for a 45% stake in Canadian cannabis company Cronos (CRON - Get Report) , and another $12.8 billion for a 35% stake in popular e-cigarette producer Juul. 

Philip Morris, meantime, has been doing the same thing. This summer the company licensed heated tobacco product IQOS to Altria. The Food and Drug Administration earlier this year cleared iQOS to be sold in the U.S.

Shares of Philip Morris fell nearly 7% to $72.47 in trading on Tuesday. Shares of Altria Group dropped 3.97% to $45.26.

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