Philip Morris International (PM) - Get Report shares surged Wednesday after the world's biggest tobacco company said it had ended merger talks with Altria Group (MO) - Get Report  as the two groups re-think their smokeless tobacco strategies.

Altria, which owns a minority stake in e-cigarette group Juul Labs that cost nearly $13 billion, has been under pressure for much of the past two months, pulling its shares sharply lower, as lawsuits linked to deaths and illness allegedly tied to vaping continue to escalate. Juul insists it has "never marketed (its products) to youth" and does not want "any non-nicotine users to try our products."

Nonetheless, Juul said Wednesday it was suspending its U.S. advertising campaign and replacing CEO Kevin Burns with Altria executive K.C. Crosthwaite.

"After much deliberation, the companies have agreed to focus on launching IQOS in the U.S. as part of their mutual interest to achieve a smoke-free future," said CEO André Calantzopoulos in a brief statement, referencing a form of nicotine injection that doesn't use combustion, fire, ash, or smoke that won FDA approval for U.S. sales earlier this year.

Philip Morris shares were marked 6% higher at $76.00 following news that the merger talks had ended, while Altria shares fell 1.6% to $40.07

Altria also said in a separate statement that it sees adjusted 2019 earnings in the range of $4.19 to $4.27 per share, 4 cents higher from its prior estimate and just ahead of the Refinitiv consensus forecast of $4.18 per share. It also reiterated its forecast of a 5% to 6% decline in U.S. cigarette volume declines over the course of the year. 

Philip Morris International, which was spun off from Altria in 2008, had planned a "merger of equals" with Altria that could have created a global tobacco giant worth more than $200 billion. Altria shareholders were set to own between 41% and 42% of the combined group.

"While we believed the creation of a new merged company had the potential to create incremental revenue and cost synergies, we could not reach agreement," said Altria CEO Howard Willard. "We look forward to continuing our commercialization of IQOS in the U.S. under our existing arrangement."