Philip Morris International (PMI), The Swiss-based tobacco giant announced its decision to introduce smoke-free tobacco worldwide.
The joint venture will be based in the Swedish capital Stockholm. Both firms will hold an equal stake, PMI said in a statement released in Washington.
"The smoke-free category has demonstrated substantial growth in Sweden and Norway over a number of years" Swedish Match boss Lars Dahlgren said. "We believe that smoke-free tobacco products, and especially Swedish Snus, have potential outside of their current markets."
"Snus" tobacco most commonly comes in a small tea-bag-like pouch which is placed against the users' gum. It is widely used in Scandinavia.
PMI said the promotion of the product could help offset concerns about the health risks of smoking tobacco.
"Snus has been recognized by many in the scientific and public health community to be significantly less harmful than cigarette smoking," the company said.
The sale of some non-smoked tobacco products has been banned in the European Union since 1992, except in Sweden, which won an exception from the rules when it joined the EU in 1995.
PMI is one of the world's biggest tobacco producers. Present in 160 countries, it makes the Chesterfield and Marlboro brands.