Altria Group Inc is in advanced talks to buy e-cigarette startup NJOY Holdings Inc for at least $2.75 billion, The Wall Street Journal reported Monday, citing people familiar with the matter.

Shares of the company were down nearly 1% following the news.

The deal for NJOY, one of the few e-cigarette makers whose products have clearance from federal regulators, could be announced as soon as this week, the report says, adding that the talks could still fall apart.

The Journal further notes that the proposed deal includes an additional $500 million earnout if regulatory milestones are met.

The potential deal comes at a time when the Marlboro maker is looking for alternatives after it had exercised in September the option to be released from its non-compete deal with Juul Labs Inc almost four years after buying a 35% stake in the company.

The Journal reported in October Juul was preparing to file for Chapter 11 bankruptcy, while searching for an alternative — such as a sale, investment or loan — that could stave off a filing.

NJOY and Altria did not immediately respond to Reuters' requests for comment.

In July, the WSJ had reported that NJOY has hired bankers for a possible sale of the company, adding that the privately held firm is likely to be valued at up to $5 billion.