SAO PAULO, Aug 31 (Reuters) - Kroton Educacional SA , the world's largest education company by market value, may sell units of Estácio Participacoes SA in order to secure antitrust approval for a takeover of its rival, a person with direct knowledge of the matter said on Wednesday.
Both companies filed documentation on Wednesday before antitrust watchdog Cade seeking approval of the 5.5 billion-real ($1.7 billion) deal to form an education company with over 1.5 million students, announced last month.
One way to ease monopoly concerns would be for Estácio to dispose of the UniSEB college operation and agree to suspend enrollment at another unit known as Unesa for as many as three years, said the person, who asked for anonymity because the proposal remains private.
A similar remedy was applied when Kroton and former rival Anhanguera Participações SA applied for Cade approval to combine two years ago.
Another possibility would be selling Unesa, but such a deal might be more difficult from a regulatory standpoint because spinning off the unit's classroom and long-distance education programs would require government approval, the person said.
Kroton and Estácio, as well as Brasilia-based Cade, did not have an immediate comment. In complex merger cases, Cade has up to 330 days to evaluate a merger filing.
$1 = 3.23 Brazilian reais Reporting by Ana Mano; Writing by Brad Haynes and Guillermo Parra-Bernal; Editing by Bill Rigby