KT&G Corp. (033780.SE), South Korea's dominant tobacco company, said Tuesday it has signed a brand-license pact with Imperial Tobacco Group PLC (IMT.LN) to churn out the European company's Davidoff in its domestic plants from the first half of 2010.

The strategic tie with Imperial Tobacco is mainly to win back young customers in their 20s from multinational tobacco companies such as Philip Morris (PM) and British American Tobacco (BAT.NR), KT&G said in a statement.

"Britain's No. 1 tobacco company will be able to secure a bridgehead in the South Korean tobacco market through the business ties," a KT&G spokesman said by phone.

KT&G's domestic sales fell to 13.2 billion cigarettes in the fourth quarter of 2009, down 14% from 15.3 billion cigarettes a year earlier.

-By Kyong-Ae Choi, Dow Jones Newswires; 822-3700-1903; kyong-ae.choi@dowjones.com