* Deal for Belgium's Gryson worth nearly $600 million
* Market shrinking at home, JT looks overseas for growth
* Sale includes Domingo, Fleur du Pays, Orlando brands
* JT shares up 17.5 pct since start of 2012
TOKYO, May 24 Japan Tobacco Inc (JT),
the world's third-largest cigarette maker, said on Thursday it
will buy Belgian tobacco product maker Gryson NV for 475 million
euros ($597.7 million) to cut its reliance on the domestic
JT, which sells more than half the cigarettes smoked in
Japan, has seen its home market shrink by almost 30 percent in
the last decade and aims to complete the deal within the current
Gryson has established stakes in the markets for
individually made machine and hand-rolled cigarettes in several
European countries, including France, Portugal and Spain.
JT will acquire all shares in Gryson, which produces
filters, loose tobacco and rolling papers for brands like
Domingo, Fleur du Pays and Orlando, from unlisted GT&Co BVBA
using existing funds and loan facilities.
The purchase price values the transaction at 12.3 times
Gryson's 2012 forecasted earnings before interest, tax,
depreciation and amortization, JT said in a statement.
The company did not use a financial advisor on the deal, a
JT spokeswoman said.
Shares of JT have surged 17.5 percent since the start of
2012, beating a 1.3 percent rise in the Nikkei 225 average
, as Japan's government inches closer to selling part of
its 50 percent JT stake.
Shares of JT rose 1.1 percent prior to the announcement on
Thursday versus a 0.1 percent gain in the Nikkei benchmark.
($1 = 0.7947 euros)
(Reporting by James Topham and Mayumi Negishi; Editing by
Michael Watson and Matt Driskill)