UPDATE 1-Citizen to buy watchmaker Bulova from Loews

(Updates with details, background)

TOKYO Oct 4 (Reuters) - Japanese watch maker Citizen Holdings Co (7762.T) said it would buy rival Bulova Corp from conglomerate Loews Corp LTR.N for about 28.8 billion yen ($247 million) to help it expand in the United States.

Citizen said it would buy all shares in Bulova in January from Loews, a sprawling conglomerate whose businesses also include financial, tobacco, energy and hotel companies.

A Citizen spokesman said acquiring Bulova fits with its strategy of diversifying its portfolio of brands. Bulova will strengthen its presence in the $200 to $600 segment of the market, he said.

The spokesman said Bulova would also help it expand in the United States, the world's biggest watch market.

Pior to the announcement, shares of Citizen closed down 2 percent at 1,127 yen. The benchmark Nikkei average .N225 fell 0.6 percent.