Marlboro cigarette maker Altria Group Inc. is nearing an agreement to buy more than a third of Juul Labs Inc., valuing the e-cigarette startup at $38 billion, people familiar with the matter said on Wednesday.

The deal would value Juul at more than double the roughly $16 billion valuation it fetched in July in a private funding round, highlighting the San Francisco-based company's explosive growth.

Juul's vaping devices, which resemble a USB flash drive, have helped the company quickly become the market leader in the U.S. e-cigarette business, growing from 13.6 percent of the market in early 2017 to more than 75 percent last month, according to a Wells Fargo analysis of Nielsen retail data.

Altria (MO) will pay $12.8 billion in cash for a 35 percent stake in Juul, one of the sources said. The deal could be announced on Thursday or Friday, according to the sources. The Wall Street Journal first reported on the terms of the imminent deal.

Altria and Juul did not immediately respond to requests for comment.

Big tobacco companies have been investing in e-cigarettes as U.S. smoking rates decline, but those products have lost significant market share over the last year as Juul's popularity has surged.

Altria said this month it would discontinue some of its e-cigarette brands, including all of MarkTen and Green Smoke e-vaper products, based on their financial performance and will take a related pre-tax charge of $200 million in the fourth quarter.

Altria has invested in e-cigarettes in recent years through its Nu Mark subsidiary, which sells devices such as the MarkTen in convenience stores and tobacco shops. In 2014, Altria acquired e-cigarette startup Green Smoke Inc. for $110 million.

Altria's products, however, have lost significant ground to e-cigarette maker Juul Labs Inc over the last year, as have e-cigarette brands from other major tobacco companies.

The Juul investment does not come without risks for Altria. Juul has faced heightened pressure from U.S. regulators as the growing popularity of flavored e-cigarettes among teenagers has sparked fears of a new generation of nicotine addicts.

Federal data released this month showed a 78 percent increase in high school students who reported using e-cigarettes in the last 30 days, compared with the prior year, coinciding with the rise in Juul's popularity.

Also this month, Altria announced a $1.8 billion investment in Cronos Group Inc., which could give it up to 55-percent ownership of the Canadian cannabis producer.