EXCLUSIVE-Ceconomy eyes deal with heirs of Media Markt founder-sources

Matthias Inverardi and Arno Schuetze

DUESSELDORF, Sept 23 (Reuters) - Germanys Ceconomy , Europes biggest consumer electronics group, is in talks to resolve a long-running dispute with a major shareholder of subsidiary Media Saturn that could involve a share and cash deal worth roughly 1 billion euros ($1.10 billion), people close to the matter said on Monday.

Under the transaction being discussed, the holding of the Kellerhals family, Convergenta, would swap its stake in the jointly held Media Markt chain of electronics stores for a 25% stake in Ceconomy and get a cash payment on top, the sources said.

Ceconomy management had battled for years over strategy with German billionaire Erich Kellerhals, the co-founder of Media Markt, who for years used his remaining stake in Media Markt to block Ceconomy management's plans.

Kellerhals died in 2017, prompting his heirs to attempt to resolve the dispute.

Sources close to the talks said the two sides were discussing the possibility of merging Ceconomy and the Media-Saturn holding group, in which Kellerhals' investment firm Convergenta holds a 21% stake. Ceconomy declined to comment.

($1 = 0.9117 euros) (Writing by Emma Thomasson, editing by Louise Heavens)