* Haniel raised 2 bln euros from Celesio sale
* Looking outside retail sector at unlisted firms
* No plan to cut Metro stake
* Haniel says Metro shares undervalued
* Metro Russia IPO plan not cancelled (Adds comments from CEO interview)
By Matthias Inverardi
DUISBURG, Germany, April 7 (Reuters) - German investment group Haniel has a budget of 1.3 billion euros ($1.8 billion) for acquisitions and is looking primarily outside the retail sector and at unlisted companies, Chief Executive Stephan Gemkow said on Monday.
The announcement signals a change in strategy for the group, which has been shedding assets to offset a massive 2012 writedown on its holding in German retailer Metro and reduce debt which stood at 1.6 billion euros at the end of 2013.
Family-owned Haniel received about 2 billion euros following the sale of its stake in German drugs distributor Celesio to U.S. drugs group McKesson this year.
Gemkow, speaking to journalists after his group published its annual report, declined to give details on which companies might be in focus for acquisitions or when takeovers might be possible, saying there was no time pressure.
He also said Haniel, Metro's biggest shareholder, did not plan to reduce its holding in Europe's fourth-biggest retailer after cutting its stake to about 30 percent from 34.2 percent in late 2012, saying it sees potential for appreciation.
In January, Haniel denied a report it was pushing for a breakup of Metro to raise funds, including the sale or listing of Kaufhof department stores, Real hypermarkets and Media-Saturn consumer electronics chain.
The report said Haniel had threatened not to extend the contract of Metro Chief Executive Olaf Koch - which runs until Sept. 13, 2015 - unless he agreed to a breakup of the group.
Gemkow said it remained to be seen if Koch could improve the company's fortunes but that he had already achieved significant success to stabilise and consolidate the group.
"We expect growth and margin improvement, which should be reflected in a rising share price," Gemkow told Reuters, adding that 40 euros would be a fair valuation for the company.
Shares in Metro were down 1 percent at 29.52 euros at 1129 GMT, compared with a 0.7 percent weaker European retail sector .
The stock has fallen 16 percent this year, hit by concerns over Metro's exposure to Russia. The Ukraine crisis has forced Metro to delay the stock market listing of a quarter of its Russian cash-and-carry wholesale operation.
Gemkow said the listing plan had not been ditched although he did not know when Metro might consider reviving it.
($1 = 0.7303 euros) (Reporting by Matthias Inverardi; Writing by Emma Thomasson; Editing by Erica Billingham and Pravin Char)