NEW YORK—The board of Swedish Match AB yesterday recommended that shareholders approve a 161.2 billion Swedish krona (UU$16.2 billion) all-cash offer from Philip Morris International for shares of the OTP company, maker of snus, cigars and the market-leading ZYN brand tobacco-free nicotine pouch.

Swedish Match dominates the oral nicotine category, controlling nearly half of the global market, followed by British American Tobacco PLC and Altria Group Inc. Philip Morris International sells Marlboro cigarettes and the IQOS heated-tobacco device outside the U.S. and is eyeing additional growth in the OTP category as it moves to become a majority smoke-free business by 2025.

Momentum from the company’s U.S. smoke-free business drove fiscal first-quarter group sales and operating profit, Swedish Match reported yesterday. Group sales rose 10% and operating profit increased 1% in the quarter.

“ZYN nicotine pouches in the U.S. continued to gain market shares on a sequential basis and demonstrated solid sales and profit growth,” Swedish Match reported. The cigars segment, meanwhile, saw sales and operating profit decline “on lower volumes and higher production costs” compared with a strong year-ago first quarter, the company said.

Philip Morris “is the natural buyer for Swedish Match both from a price/size capacity but also from a deliverability/anti-trust perspective,” Alastair Mankin, vice president at brokerage Cowen, said in a note, according to Reuters.