FRANKFURT - Celesio's main shareholder Haniel put the brakes on the German drug distributor's foray into the Brazilian market, throwing into doubt a takeover that markets had cheered.

Eckhard Cordes, the head of Haniel and chairman of Celesio had legal and financial concerns about the planned purchase of Brazil's largest drugs distributor Panpharma, a spokeswoman for family-owned conglomerate Haniel told Reuters.

The Haniel family shares these concerns, the spokeswoman said, adding that Cordes had been briefed on the acquisition project well in advance.

A Celesio spokesman declined to comment.

The deal, which was announced on Monday, was due to be rubber-stamped by Celesio's supervisory board on Tuesday, but the matter was deferred to the next meeting amid concern about the speed of the company's expansion, sources with knowledge of the matter told Reuters.

In an email to analysts on Tuesday, the company said that the meeting had been postponed to guarantee full attendance and that the board would meet again within the next two weeks. A copy of the e-mail was obtained by Reuters.

Considering Haniel's stake, they can veto this, which would not be good, a London-based analyst said, speaking on condition of anonymity.

Growth opportunities in Europe are very limited in wholesale and it's very difficult to make acquisitions in that mature market because of antitrust concerns, the analyst added.

Brazil would have been a positive step to diversify.

EXPANDING IN SWEDEN

 In a separate statement on Wednesday, Celesio said it aimed to set up a chain of more than 100 pharmacies in Sweden to benefit from deregulation in that country and reduce dependence on the British market.

Celesio had said on Monday it agreed to acquire a 54 percent stake in privately held Panpharma through a capital increase with an option to buy additional shares, one day after Reuters reported the deal was imminent.

Celesio at the time did not disclose financial terms but financial market sources put the price at less than 200 million euros ($281.4 million).

The acquisition of Panpharma, which generated sales of 3 billion Brazilian real ($1.55 billion) last year, marks Celesio's first major expansion step outside Europe and is in line with the company's strategy to grow in emerging markets.

The stock market has welcomed the move. Celesio's shares have won more than 13 percent this week before Wednesday's news. Shares, which rose on Wednesday by as much as 6 percent, pared gains on the news and were up 2.8 percent by 1425 GMT.

Commerzbank analysts earlier this week said the purchase could yield a compelling growth outlook while analysts at Morgan Stanleysaid the move was incrementally positive.

Franz Haniel & Cie. GmbH holds a 55.8 percent stake in Celesio. Its chief executive Cordes also heads German retail giant Metro MEOG.DEL, in which Haniel holds a key stake.

Celesio is following through on its strategy to reduce dependency on Britain, where it makes almost half of total operating earnings.

The owner of the Lloyds Pharmacy chain has been hurt by lower payments for generic drugs introduced by Britain's National Health Service and a weak pound against the euro.

Options to expand in its German home market also remain limited after Europe's highest court upheld German legislation preventing non-pharmacists from setting up shop there. ($1=.7107 euros) (Editing by Mike Nesbit)