* Antitrust issues spur sales from $5 bln world No. 1
* Month before bids due for whole package or parts -sources
* Products with $500 million annual sales said to be offered
By Quentin Webb
LONDON, Oct 21 (Reuters) - Merck & Co Inc and Sanofi-Aventis SA have begun selling parts of the businesses they are combining to form the world's largest animal-health operation, people familiar with the matter said.
The two drugmakers are selling some product lines to allay competition concerns, offering smaller players in the $19 billion animal-health industry a last clear chance to bulk up.
Bidders are being offered the chance to buy products with about $500 million in combined annual sales, the people said, either in a single bundle or in several smaller packages.
"We will be proactive on divestitures in markets identified by our antitrust advisors as likely to require such divestitures. We will propose solutions to regulators," a Merck spokeswoman said in an email.
She said the two were preparing to file notifications with antitrust regulators in Europe and the United States, but added: "It would be premature to speculate about any eventual outcome."
Sanofi did not immediately respond to requests for comment. (Reporting by Quentin Webb; additional reporting by Philipp Halstrick in Frankfurt, Ransdell Pierson in New York, and Jessica Hall in Philadelphia; Editing by Will Waterman)