* Talks with CSN, Arcelor/Nippon continue - sources
* End-September deadline for sale increasingly unlikely - sources
* Shares down 3 percent in early trading
FRANKFURT, July 26 (Reuters) - German steelmaker ThyssenKrupp is continuing talks on selling its Steel Americas division to Brazil's Companhia Siderurgica Nacional (CSN) but meeting an initial end-September deadline is becoming increasingly unlikely, two sources familiar with the situation said on Friday.
"We are not looking at getting it done by hook or by crook by late September but trying to get the right outcome," one said.
Shares in ThyssenKrupp were down 3 percent at 16.82 euros by 0920 GMT, making them the top faller in the main German market index, after a media report said that the talks had stalled.
The German steelmaker wants to sell its loss-making Steel Americas business, which comprises the Brazilian CSA mill, and a plant in Alabama in the United States as it shifts investment to higher-margin products and services such as elevators, submarines and parts for manufacturing plants.
One option still under discussion, according to the sources, is that ThyssenKrupp would lower its stake in Brazilian semi-finished slab mill CSA to 33 percent, while CSN would acquire an interest of 33 percent or more. Brazilian iron ore miner Vale would at least retain its current 27 percent holding.
Separately, Thyssen is still in talks with CSN as well as a partnership of ArcelorMittal and Nippon Steel over a sale of its U.S.-based mill, the sources added.
Earlier the Wall Street Journal said on its website that talks with CSN were on the brink of failure as ThyssenKrupp had asked CSN to raise its $1.5 billion bid for the Alabama plant after ArcelorMittal and Nippon Steel had offered $2 billion.
If CSN doesn't get the Alabama plant it could jeopardise an agreement in principle reached earlier this month regarding the Brazilian semi-finished slab mill CSA, the Journal reported.
ThyssenKrupp has struggled to find a buyer willing to pay its price for all or part of Steel Americas and has had to write down the value of the business to 3.4 billion euros over the past year, from more than 7 billion euros.
A spokesman for ThyssenKrupp, which invested 12 billion euros ($15.88 billion) to build the two steel plants, said the company was still in intensive talks over the disposals with a leading bidder and aimed to reach a deal promptly.