UPDATE 1-Japan's Santen licenses glaucoma drug to Merck & Co

* Merck to sell Santen eye drug in Americas, western Europe

* Santen keeps Germany, eastern, northern Europe and Asia

TOKYO, April 15 (Reuters) - Japan's Santen Pharmaceutical Co 4536.OS agreed to license to Merck & Co Inc MRK.N its glaucoma and ocular hypertension drug tafluprost, in a move to help drive global sales of one of Santen's key products.

Under terms of the agreement, Santen is granting the U.S. company exclusive rights to sell tafluprost in North and South America, Africa and western Europe excluding Germany, while keeping to itself German, eastern and northern European and Asian markets.

In return, Santen will receive royalty payments and other fees. The company declined to disclose the details of the payments.

A Santen spokesman said the company expects the drug, which was developed jointly with Asahi Glass Co 5201.T and was launched in Japan and parts of Europe last year, to grow into one of its earnings pillars in the medium term.

Glaucoma generally begins with a subtle loss of side vision and can progress to loss of central vision and blindness.

Prior to the announcement, shares in Santen closed up 3 percent at 2,620 yen, outperforming the Nikkei average .N225, which fell 1.1 percent. (Reporting by Kiyoshi Takenaka; Editing by David Holmes)