Wires

UPDATE 2-Philip Morris and Altria ditch merger talks amid vaping crackdown

Siddharth Cavale and Nivedita Balu

* PMI and Altria abandon their merger talks

* E-cig maker Juul says CEO is stepping down (Adds detail)

Sept 25 (Reuters) - Philip Morris International has scrapped merger talks with Altria Group and will instead focus on the launch of its tobacco-heating product iQOS in the United States, the company said on Wednesday.

The abandonment of the mega-merger comes at a time when e-cigarettes and vaping are facing intense regulatory scrutiny across the world, rattling the tobacco industry and the strategies of big players.

"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," Philip Morris CEO André Calantzopoulos said. The deal would have seen the tobacco companies reuniting a decade after their split and creating an industry heavyweight.

Philip Morris's leading heat-not-burn product, iQOS, is not a typical vaping device but instead heats packages of ground-up tobacco into a nicotine-filled aerosol.

Altria, though, has a 35% stake in U.S. market-leading e-cigarette company Juul Labs Inc, whose devices vaporize a liquid containing nicotine.

Separately, Juul reported on Wednesday its CEO Kevin Burns was stepping down, and that it would suspend all broadcast, print and digital advertising in the United States.

Shares in Philip Morris rose 6.5% in premarket trading, while those of Altria MO.N were up 3.7%.

Rivals British American Tobacco and Imperial Brands rose between 2% as 3% in afternoon trading on the announcements. (Reporting by Siddharth Cavale and Nivedita Balu in Bengaluru; Editing by Pravin Char)