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UPDATE 4-Philip Morris in talks to buy smaller rival Swedish Match

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(Adds comments from Swedish Match shareholder Bronte Capital)

May 9 (Reuters) - Philip Morris International Inc is in talks to buy rival Swedish Match AB, the companies said on Monday, as the Marlboro maker looks to expand its smoke-free options amid rising global scrutiny on the sale of traditional cigarettes.

The talks between the companies were in progress, but it was uncertain whether an offer will be made, Philip Morris said in a separate statement. Shares of the company were up 1.6% at $100.53.

Swedish Match had a market capitalization of 120.92 billion Swedish krona ($12 billion), as of last close, according to Refinitiv data. Philip Morris had a market capitalization of $153.37 billion.

Last year, Philip Morris bought asthma inhaler maker Vectura for $1.44 billion as part of its long-term plan to develop smoke-free products and switch to being a "broader healthcare and wellness" company.

The U.S. Food and Drug Administration in April issued a long-awaited proposal to ban flavored cigars and menthol cigarettes, which account for more than a third of the industry's overall market share in the United States.

Swedish Match makes snus, a wet snuff product that is banned in all European Union countries except Sweden. The company has grown in the U.S. cigar market in recent years and hopes for similar success there with snus, which faces competition in its home market.

The talks between the Marlboro maker and Swedish Match could yield a deal as soon as this week and it could be valued at $15 billion or more, the Wall Street Journal first reported earlier on Monday, citing people familiar with the matter.

Bronte Capital, which owns 15.1 million shares of Swedish Match, or about 1% of the company, said the reported offer undervalues the target.

"We believe the future for Swedish Match is considerably better than the price reflected and we are not happy with this offer," it said in a statement, adding that it would consider its future actions.

Swedish Match in March shelved plans to spin off and list its U.S. cigar business. ($1 = 10.0472 Swedish crowns) (Reporting by Praveen Paramasivam in Bengaluru; Additional reporting by Lincoln Feast in Sydney; Editing by Anil D'Silva, Shinjini Ganguli and Subhranshu Sahu)