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UPDATE 1-Varta sells appliance battery ops to Rayovac

(Adds detail, quotes from statement)

FRANKFURT, July 29 (Reuters) - Germany's Varta AG said on Monday it would sell its appliance battery business to Rayovac Corp for 262 million euros ($259.1 million), boosting the U.S. firm's position in the global battery market.

Varta said in a statement that Rayovac, a leading manufacturer of rechargeable and hearing-aid batteries, would buy all its appliance battery operations outside Germany and take a 51 percent stake in a new joint venture in Germany.

With 2001 sales of 398 million euros, Varta's appliance battery division made up almost a quarter of total group sales which amounted to 1.2 billion euros, a company spokeswoman said.

"Once the deal is completed, Rayovac will be one of the biggest appliance battery manufacturers in the world and market leader in Germany, the biggest battery market in Europe," Rayovac Chief Executive Dave Jones said in a statement.

Varta, which specialises in portable and automotive batteries, said the transaction would not affect its joint venture in Brazil, nor its microbattery business.

The deal, which must still be approved by Varta's supervisory board and its shareholders, is likely to close later this year, the Hanover-based firm said. Varta is 92-percent owned by a consortium led by Deutsche Bank unit DB Investor.

Rayovac, which has operations in 60 countries, posted 2001 sales of $616 million.