U.S. tobacco company Altria Group (MO 1.38%), the rights holder to the Marlboro cigarette brand in the U.S., recently announced a deal to acquire electronic cigarette maker NJOY Holdings for $2.75 billion in cash. Investors familiar with Altria might groan; it looks like Altria's taking another swing at a multibillion-dollar acquisition after blowing billions on its infamous Juul investment.

But there isn't nearly as much risk this time. Altria is undoubtedly paying a hefty price for what it's getting, but the acquisition could make far more sense in the long run when you consider the circumstances of the deal. Here is what matters for shareholders.

NJOY obtained what Juul could not

It's well known that smoking cigarettes is a steadily dying habit in the United States. Just peek at Altria's annual reports and you'll find declining cigarette shipment volumes annually. While price increases pushed Altria's profits higher over the years, the company has also begun looking for long-term business opportunities outside smokeable products. Electronic cigarette company Juul was supposed to be that, but regulators steadily derailed Juul's business.

NJOY is the only pod-based electronic cigarette product with premarket tobacco application (PMTA) approval from the Food and Drug Administration (FDA). That means that Altria can legally market and sell NJOY's approved products in the U.S. market. NJOY has several approvals, including the devices and tobacco-flavored pods at varying nicotine levels.

Investors can think of NJOY as Altria's fast pass to the vaping market in America. The electronic cigarette landscape has become increasingly competitive; British American Tobacco's Vuse device has a pending PMTA, and former-partner-turned-competitor Philip Morris International plans on bringing its products to the U.S. market next year. Altria felt it needed a market-ready product as quickly as possible.

The 8% yield dividend isn't going anywhere

A significant acquisition can raise eyebrows for those worried about a dividend cut. But fear not; it's doubtful the dividend will go anywhere. Altria has $4 billion in cash and will cut a check for NJOY. Additionally, Altria will receive $1.7 billion from Philip Morris International in July as part of their Iqos breakup.

MO Total Dividends Paid (TTM) Chart

MO Total Dividends Paid (TTM) data by YCharts

That should be plenty of money to manage the acquisition and doesn't factor in future cash flow from Altria's core business. Annual free cash flow of about $8 billion minus $6.5 billion in dividend payments leaves another $1.5 billion in new cash by year-end. Management reiterated the company's current $1 billion share repurchase program, underlining confidence in the balance sheet. There isn't much for dividend investors to worry about until something changes.

The electronic market could move the needle

Why is Altria still chasing the electronic cigarette market after wasting billions on Juul? Because the U.S. vaping market could still fuel long-term growth. Management estimates that vaping in the U.S. has grown to 15% of total tobacco volume, a user base of 13.7 million users doing $7 billion in annual sales.  

A study by Grand View Research estimates that the global electronic cigarette market could grow at an average of 30% annually through 2030. The United States has traditionally been one of the most lucrative markets for nicotine products because of the country's high disposable income. The regulatory hurdles of PMTAs have created a potential race for market share, which could fuel newfound revenue growth if Altria can grab a meaningful piece of it.

Will that happen? It certainly could; NJOY has an estimated 3% retail share of vaping in the United States. Altria will roll the product out at its more than 200,000 points of sale across the country, where Marlboro commands premium shelf space. This acquisition isn't something to buy or sell the stock on today, but it could make a big difference for investors down the road.