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Reunions can often be troublesome. So it has proved with plans to reunite the two halves of the Marlboro cigarette empire.

In 2008, Altria - which owns the Marlboro brand in the US - spun off Philip Morris International (PMI), which owns the brand in 180 other countries.

The idea was to protect the fast-growing latter business from a legal onslaught in the world's most litigious country.

Earlier this year, with the torrent of US tobacco litigation having been settled, the two companies announced plans to reunite.

But on Wednesday the deal - which would have created a $200bn (£161bn) colossus - went up in smoke.

Ironically, the failure of the talks again comes back to the US. Since the demerger, both companies have sought to adapt to a world where, even in some of the fast-growing developed markets in which PMI operates, smoking is in decline.

PMI's response to the changing environment was to invest more than $6bn (£4.8bn) in a product called IQOS, an e-cigarette product that heats tobacco but does not burn it, as with cigarettes. PMI has taken out advertisements in numerous countries, including the UK, in which it has said that it hopes eventually to move to a "smoke-free" future and no longer sell cigarettes.

By contrast, Altria's response in December last year was to buy a 35% stake in Juul Labs, a vaping company. From a standing start, less than four years ago, it has built up a 75% share of the US e-cigarette market. Altria's $12.8bn (£10bn) investment, valuing Juul at $38bn (£30bn), was seen as taking out an insurance policy against the decline in smoking.

Yet that has now hurt Altria. Juul is increasingly being accused of encouraging a rapid take-up of vaping among teenagers. And unlike in many European countries, where e-cigarettes are regarded as a successful way of weaning people off smoking and as a less harmful alternative to traditional cigarettes, American health watchdogs have reached the opposite conclusion.

In June this year, San Francisco - where Juul was founded - became the first US city to ban sales of e-cigarettes, while New York and Michigan banned sales of flavoured vaping products, of the kind popularised by Juul, earlier this month.

Juul has sought to respond to health concerns by launching a new version of its product which monitors a consumer's use of vaping products. It has also lobbied politicians with warnings that bans on vaping products will simply drive consumers back towards cigarettes.

Yet that battle was effectively lost when, earlier this month, the US Food and Drink Administration, the country's main health watchdog, announced a nationwide ban on flavoured vaping products.

The Trump administration said the ban - which would extend to mint and menthol-flavoured e-cigarettes and allow only tobacco-flavoured vaping products - had been inspired by a government survey that pointed to a big jump in vaping among teenagers.

This survey suggested that more than a quarter of American high school students now use e-cigarettes, up from just over a fifth a year earlier, with most consuming fruit, menthol or mint flavours.

Mr Trump said at the meeting where the ban was announced: "We have a problem in our country. It's a new problem. It's called vaping, especially vaping as it pertains to innocent children."

The ban appears to be what has put paid to the planned merger between PMI and Altria.

As news was breaking that the deal was off, Juul announced that its chief executive, Kevin Burns, was stepping down, to be replaced by KC Crosthwaite, Altria's chief strategy officer, who is experienced in regulatory matters. It also said that it would be suspending all broadcast, print and digital advertising in the US.

Altria's chief executive, Howard Willard, said it had not been possible to agree terms with PMI.

He was also reluctant to criticise the Trump administration, telling CNBC: "I have not spoken to them [the Trump administration] directly but I have to say, given the increase in use of these vapour products, it's important to take action to address that issue."

This, along with the change of management at Juul, is being seen as a recognition by Altria that the trend in youth vaping has gone too far.

For its part, PMI did not mention the vaping ban, although it is assumed to have got cold feet over the deal due to the government's growing hostility towards vaping.

André Calantzopoulos, the chief executive of PMI, said: "After much deliberation, the companies have agreed to focus on launching IQOS in the US as part of their mutual interest to achieve a smoke-free future."

He said there was little evidence that IQOS was "significantly appealing to youth or to non-smokers" but instead cited figures suggesting that eight million smokers worldwide had switched to the product.

Shares of PMI have risen by more than 6% on the news while shares of Altria fell by just under 0.25%. Juul's decision to rein in its US activities may signal a retrenchment elsewhere. In recent days, Juul has stopped selling its products online in China, while, further afield, India has just banned e-cigarettes.

All of this will have implications for the big two UK-listed tobacco companies British American Tobacco and Imperial Brands - respectively the second and third largest tobacco companies in terms of sales - which both saw their shares rise today in an otherwise falling market. Both have their own vaping products, BAT's called Vype and Imperial's called Blu, which were seen as facing fierce competition from Juul. The latter's problems will be seen as good news for Imperial, in particular, due to its strong position in Europe. The UK, where Imperial enjoys market leadership in traditional tobacco thanks to brands like Lambert & Butler, Regal and Superkings, is Europe's biggest vaping market.

As for Altria, which last year became the first big traditional tobacco company to dip its toe in the cannabis market, it is now likely to face tough questions from shareholders for apparently having overpaid for its stake in Juul.

However, if its shares continue to fall, it is just possible that PMI might revive merger talks further down the line. There remains industrial logic in these two companies reuniting.