What's going on?

News broke on Tuesday that Philip Morris International is in talks with former American bedfellow Altria to recombine forces and create a $210 billion tobacco giant.

What does this mean?

Philip Morris and Altria split in 2008, partly because the latter wanted to emphasize its non-tobacco business: Altria previously owned large stakes in Kraft Foods and brewer SABMiller. But with those businesses now sold off � and rival British American Tobacco enjoying the fruits of a successful merger with Reynolds American � the time may be right to rekindle old flames.

While discussions are at an early stage, the American and overseas makers of Marlboros are considering a �merger of equals�. Among other things, that could allow them to better target a growing global market for e-cigarettes and cannabis products: Altria owns a 35% stake in vape merchant Juul and 45% of Canadian cannaco Cronos.

Why should I care?

For markets: Investors are split on stocks.
Both Altria and Philip Morris saw their share prices fall on Tuesday, likely reflecting the risk a deal goes awry. But trade disputes and slowing economic growth are leaving investors increasingly polarized on stocks in general. Swiss wealth management big cheese UBS on Monday recommended that clients downsize their stock holdings for the first time since 2012. Analysts at investment bank JPMorgan disagree: they think support from central banks in Europe and the US � including another interest rate cut from the latter � will give stocks a bumper end to the year.

The bigger picture: J&J may provide a salutary lesson.
Altria has already agreed to market Philip Morris�s flagship iQOS tobacco-heating device in the US from September. But with American scientists beginning to link deaths to vape use, the tobacco litigation fears that helped prompt the two companies� 2008 split might again be smoldering. Johnson & Johnson knows all about lawsuits: on Monday, a judge in Oklahoma ordered the consumer goods giant to pay $572 million for contributing to the state�s opioid crisis.