NEW YORK/FRANKFURT, Oct 7 (Reuters) - Assa Abloy AB (ASSAb.ST) is considering options including selling its Yale and Emtek locks brands as it seeks to overturn U.S. antitrust opposition to its planned purchase of Spectrum's Hardware and Home Improvement (HHI), three sources familiar with the matter said.

Stockholm-listed Assa Abloy, the world's leading lockmaker with a market value of 231.56 billion Swedish crown ($20.79 billion), is working with an advisor to find a buyer for the brands, the sources said, speaking on condition of anonymity.

It comes just weeks after the U.S. Department of Justice (DoJ) sued to block the company's proposed $4.3 billion deal to buy a unit of Spectrum Brands Holdings Inc (SPB.N) that makes security, plumbing and builders' hardware products.

The two brands that Assa Abloy is looking to sell could be valued at about $1 billion-$2 billion, the sources said.

Potential buyers may include private equity firms, two of the sources said.

The DoJ sued to block the deal in September, saying that a merger of Assa Abloy and the HHI unit would give the Swedish company a "near monopoly" share of the mechanical door lock market and could lead to higher prices and reduced innovation for homeowners who want to buy premium mechanical door hardware or smart locks.

Spectrum's HHI unit owns the Baldwin and Kwikset lock and lock hardware brands.

Assa Abloy and Spectrum said last month that they "strongly disagree" with the Justice Department and would "vigorously contest" the suit.

Assa Abloy declined to comment on the sale talks.

"As you would know we informed the markets in September that we intend to dispute the DoJ's complaint in relation to our proposed acquisition of HHI. We are now in the process of setting together the formal appeal of their complaint," said a spokesperson for Assa Abloy.

The deal between Assa Abloy and the HHI unit was announced last year.

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Reports on European M&A with previous experience at Mergermarket, Bloomberg The Daily Telegraph and Deutsche Presse Agentur.

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