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UPDATE 4-BAT eyes Asia boost from $494 mln Indonesia deal  

British American Tobacco Plc bought a majority stake in a top Indonesian cigarette firm on Wednesday, lifting its share in the world's fifth-largest and fast-growing market as it looks to offset flat sales elsewhere.

BAT, maker of Dunhill and Lucky Strike cigarettes, said it paid $494 million for an 85 percent stake in PT Bentoel Internasional Investama, Indonesia's fourth-largest cigarette maker by volume, and would buy up the remaining shares by the end of August.

London-based world number-two cigarette maker BAT, like other major players, is looking to expand in growing emerging markets as western ones are hit by the effects of higher taxes, smoking bans and restrictions on advertising.

"The purchase... makes sense as Indonesia cigarette (market) is dominated with kretek (clove), which accounts for around 93 percent of total cigarettes consumed," said Jakarta-based analyst Ella Nusantoro of Citigroup in a note to clients.

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