Altria Group, owner of the world’s biggest tobacco company, offered to buy Indonesia’s third-largest cigarette maker for about $5.1 billion to expand in a market of 141 million smokers.

Philip Morris International, a unit of New York-based Altria, agreed to buy 40% of PT HM Sampoerna from the founding family for $1.13 a share, the companies said in a statement. It plans to buy the remaining shares of Surabaya, East Java-based Sampoerna in a tender offer for the same price, a 20% premium to the March 10 close in Jakarta.

The purchase would be the biggest ever in Indonesia by an overseas investor and make Philip Morris the country’s second-biggest cigarette maker. Philip Morris, maker of Marlboro cigarettes, is expanding in faster growing markets as rising taxes and health concerns cut the number of smokers in America.

The acquisition will probably add 3 cents a share to Altria profit in 2005, Goldman Sachs analyst Judy Hong wrote. The New York-based analyst rates the shares “outperform.”

Altria shares rose 3 cents to $65.17 at in New York Stock Exchange composite trading. Before yesterday, they had risen 16% in the past year.

Sampoerna makes “kretek” cigarettes, which contain a mixture of tobacco and sweet-smelling clove spice and sell for as little as 53 cents per pack. They account for about 90% of the 200 billion cigarettes sold each year in Indonesia, according to industry association Gappri, which estimates 141 million of the country’s 238 million people are smokers.

The investment in Sampoerna will “significantly expand our business in the world’s fifth-largest, and growing cigarette market,” the president and chief executive officer of Philip Morris International, Andre Calantzopolous, said in the statement.

Indonesia doesn’t have age restrictions on the sale of cigarettes and allows smoking in restaurants and bars. More than 69% of Indonesian men older than 20 smoke regularly, the World Health Organization estimates.

Philip Morris’s international cigarette shipments climbed 3.5% in 2004 while shipments declined 0.1% in America where consumption is declining and some smokers have switched to discount brands such as USA Gold, made by Commonwealth Brands Incorporated. Americans smoked 400 billion cigarettes in 2003, down 4%, a Department of Agriculture report stated in April.

Altria’s chief executive, Louis Camilleri, 50, told analysts on November 4 that the company, which owns Kraft Foods, is preparing to separate into two or three units “when the litigation environment permits.”

The Department of Justice, in a trial that started in September, alleges Philip Morris and other tobacco companies deceived the public and policy makers about the hazards of smoking.

The purchase of Sampoerna signals that international companies may invest more in Indonesia following President Susilo Bambang Yudhoyono’s election last year, said Hong Kong-based Michael Kurtz, Asian strategist at Bear Stearns Asia.

“It makes sense that foreign investors … would take a fresh look at this market in the context of lower political risks and the prospect of a new up-leg in the business and employment cycle,” Mr. Kurtz said.

Indonesian cigarette companies are benefiting from a recovering economy and the absence of tax increases last year.

Sampoerna’s best-selling brands include Dji Sam Soe and A Mild, and the company controls 19% of the local cigarette market. Philip Morris’s Marlboro brand accounts for 50% of Indonesia’s conventional cigarette market, Mr. Davies said.

Sampoerna, Gudang Garam, the nation’s biggest cigarette maker, and PT Djarum control more than 80% of the market in Indonesia, according to Gappri, the industry association.

Credit Suisse First Boston is advising the company on the acquisition, Philip Morris said.