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Brazil watchdog approves $2.5 bln Kroton education deal with limits

SAO PAULO, May 14 (Reuters) - Brazil's antitrust watchdog Cade on Wednesday approved Kroton Educacional SA's $2.5 billion takeover of rival education company Anhanguera Educacional Participações SA with several restrictions.

Under terms of a Cade accord with both companies, the entity resulting from the merger - which will become the world's largest for-profit education firm according to some analyst estimates - will be required to sell Centro Universitario Leonardo da Vinci. Both firms also committed to spend more on teacher training, a joint securities filing said.

The Leonardo da Vinci unit operates a distance-learning unit and two other colleges, according to the filing. The combined entity must also limit the number of distance-learning students they take on in some Brazilian cities, with the restriction in place until 2017.

The transaction, which was announced in April 2013, had faced several headwinds. These included strict Cade scrutiny and an atypical share price movement, which made the deal too expensive for Kroton to afford at one point.

Anhanguera shares rose 0.9 percent to 16.13 reais in Wednesday trading while Kroton shares shed 1.8 percent to 54.93 reais.

(Reporting by Asher Levine; Editing by Guillermo Parra-Bernal and Tom Brown)