* CD&R agrees 1.25 bln euro purchase of Mauser from DIC - sources

* One of largest disposals by Dubai state funds since crisis

* BofA advised DIC, CD&R assisted by Credit Suisse

(Adds advisers, context)

By Mirna Sleiman

DUBAI, May 11 (Reuters) - Private equity firm Clayton Dubilier & Rice (CD&R) has agreed a deal to buy Germany-based packaging group Mauser from Dubai International Capital (DIC) for around 1.25 billion euros ($1.72 billion), two sources familiar with the matter said on Sunday.

The deal is one of the largest asset disposals by a state-owned investment fund in the emirate since its debt crisis at the turn of the decade, which forced a number of these vehicles to reschedule debt worth billions of dollars.

Reuters reported on Thursday that CD&R was in advanced talks to acquire Mauser, which makes packaging equipment such as cans and drums for transporting medical waste and other hazardous chemicals. ID:nL6N0NU564

DIC declined to comment, while no one at CD&R could be reached for comment outside of normal business hours.

The Dubai fund, part of Dubai Holding, the personal investment vehicle of the emirate's ruler, Sheikh Mohammed bin Rashid al-Maktoum, was advised by Bank of America-Merrill Lynch

BAC.N . CD&R was assisted by Credit Suisse CSGN.VX , according to the sources.

Mauser was put up for sale earlier this year, having been bought by DIC from JP Morgan's JPM.N buyout unit in 2007, in a deal which valued the firm at 850 million euros. ID:nL5N0JA2BE

At one stage it seemed the Mauser sale would be part of an auction involving two other DIC assets - British engineering group Doncasters and German alumina manufacturer Almatis - but this is was scrapped and a sole process for Mauser was pursued.

ID:nL6N0M72ZH

CD&R edged out interest from a number of other parties, including a joint bid from buyout firm Ardian in combination with industry rival Technoplast and one from Pamplona.

The New York-headquartered fund is lining up a syndicated loan of around 1 billion euros to back the purchase, or 6.25 times Mauser's roughly 154 million euros in EBITDA (earnings before interest, taxes, depreciation and amortisation).

The loan is likely to be covenant-light and a mix of dollars and euros, split between first and second lien leveraged loans, banking sources had said previously. ($1 = 0.7269 euros)

(Editing by David French and Greg Mahlich)

((davidj.french@thomsonreuters.com)(+971 4 362 5864)(Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

Keywords: MAUSER SALE