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EXCLUSIVE-Unilever in advanced talks to sell Ragu sauce to Mizkan -sources

(Adds details about Unilever, Mizkan)

NEW YORK, May 21 (Reuters) - Unilever is in advanced talks to sell its Ragu pasta sauce business to Japanese condiments maker Mizkan Group for more than $2 billion, according to people familiar with the matter.

Mizkan, which calls itself the world's largest supplier of rice vinegar, prevailed over established food companies, including Hormel Foods Corp, after a months-long auction of the Ragu brand, the sources said on Wednesday.

Negotiations are still continuing and Unilever and Mizkan have yet to sign a deal, cautioned the people, who asked not to be named because the matter is not public.

Representatives for Unilever and Mizkan could not be immediately reached for comment.

The Anglo-Dutch maker of Ben & Jerry's ice cream, Dove soap and Lipton tea in April announced a strategic review of its North American pasta sauce business, which includes the market-leading Ragu brand, and the troubled SlimFast brand whose sales have tumbled in its biggest market.

The imminent divestiture of the Ragu brand would follow the sale of Skippy peanut butter and Wishbone salad dressings and underscores Unilever's continuing effort to reshape its U.S. portfolio, as it seeks to focus on higher-margin personal care products in higher-growth markets of Asia and Latin America.

The proposed deal would also mark a transformational step for privately-held Mizkan, which makes a variety of liquid condiments including vinegars, mustards, cooking wines, jellies, salad dressings, and Asian sauces.

Mizkan expanded into the U.S. market in the late 1970s and began acquiring regional condiment companies. Through its 2011 acquisition of Border Foods, Mizkan now also provides peppers, tomatillos and enchilada sauces.

(Reporting by Soyoung Kim in New York; Editing by Eric Walsh and Marguerita Choy)