UPDATE 1-S.Korea Dongwon says to buy StarKist for $363 mln

(Adds details, shares)

SEOUL, June 30 (Reuters) - South Korean food group Dongwon said on Monday it had agreed to buy the StarKist seafood business from Del Monte Foods Co (DLM.N) for $363 million, creating the world's top canned tuna company.

Del Monte, whose brands include College Inn broths and Meow Mix cat food, was exploring a possible sale of StarKist, which it bought in 2002, as soaring costs of skipjack tuna weighed on its profits in recent quarters.

Dongwon Group, whose affiliates include the world's biggest tuna fishing company Dongwon Industries Co Ltd (006040.KS) and processed food maker Dongwon F&B Co Ltd (049770.KS), said in a statement that the deal would create the world's biggest canned tuna business.

StarKist had a 37 percent share in the $1.8 billion U.S. global processed tuna market in 2007, according to Dongwon.

Dongwon Group will set up a company in the United States to manage StarKist. With the StarKist purchase, the group also plans to expand in the South American and European canned tuna markets, Dongwon said.

Shares in Dongwon F&B rose 1.83 percent to 41,750 won by 0044 GMT and Dongwon Industries was down 1.12 percent to 132,000 won, compared with the wider market's 0.49 percent loss.

The news of the deal was widely expected as Dongwon said last week that it was set to buy StarKist.

Dongwon was the second-biggest player in the Asia Pacific canned food market in 2006, trailing Japan's Hagoromo Foods Corp (2831.T) but ahead of Del Monte, according to Research and Markets. (Reporting by Rhee So-eui; editing by Jonathan Hopfner)