SOFIA (AP) - Bulgaria agreed to sell its state-owned tobacco monopoly yesterday in a deal considered to be a major test for the reformist government and its efforts to attract foreign investment.

The sale of the publicly owned Bulgartabac Holding to Sofia-based Tobacco Capital Partners and Dutch-registered Clar Innis is considered one of the largest privatization deals this year.

The deal is critical for Bulgaria, which is struggling to meet tough budget guidelines mandated by the European Union, which it hopes to join in 2006.

The consortium offered 110 million euros ($109 million) in cash for 80 percent of the assets. It also pledged to invest about 71 million euros ($70 million) in production over the next five years.

The other contenders included Russia’s Metatabak, Austria’s Tobacco Holding Gmbh, and a second Russian consortium, Rosbulgartabak.

The winner offered the best overall package, including price, investment pledges, and employment strategy, said Apostol Apostolov, the chief of the privatization agency.

The deal is expected to be completed in 45 days.

Bulgartabac’s businesses include 12 processing factories and nine cigarette factories. It also has five cigarette-making factories in Russia and one each in Ukraine, Romania and Yugoslavia.