Cigarette giant Altria Group announced it acquired a 35% stake in e-cigarette maker Juul for $12.8 billion. The investment values Juul at $38 billion.

As part of the all-cash deal, Altria agreed to pay a $2 billion bonus to Juul, which it plans to distribute among its 1,500 workers, averaging about $1.3 million each, people familiar with the matter said.

Juul sells more than 70% of cartridge-based e-cigarettes in the United States and $1.5 billion in revenue.

The news comes weeks after Altria announced it was buying a 45% stake in Canadian cannabis company Cronos Group for $1.8 billion.

Following the Juul announcement, S&P Global Ratings cut Altria’s credit rating two notches from A- to BBB.

“We do not believe Juul or Cronos will provide significant near-term investment returns to Altria,” S&P said in a statement. “Given Altria’s track record of high shareholder returns, we do not expect the company to deleverage meaningfully from pro forma levels in the next few years.”

In its downgrade, S&P also cited growing uncertainty over how the Food and Drug Administration and state regulators could affect tobacco and non-tobacco product.

It also drew criticism from activists who say e-cigarettes are a way for companies to expand markets for nicotine products.

Matt Myers, president of the Campaign for Tobacco-Free Kids, said the deal was a, “truly alarming development for public health.”

“There is no longer any question that Juul has been the driving force behind the skyrocketing youth e-cigarette epidemic that has teens and families across the country struggling to deal with nicotine addiction,” he said.

In a statement, Altria CEO Howard Willard said the company was preparing for a future in which adult smokers overwhelming smoked “non-combustible products” rather than cigarettes.

“We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction,” Willard said.

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