* Fresenius reaches agreement with B. Braun, Asklepios
* B. Braun to withdraw lawsuit against hospitals deal
* Agreement clears path for Fresenius to buy Rhoen hospitals
* Rhoen-Klinikum shares jump to 1.5-year high (Adds Muench comment, background)
FRANKFURT, Dec 20 Rhoen-Klinikum shareholders B. Braun and Asklepios have agreed to drop their opposition to the planned sale of hospitals to Fresenius SE , clearing the way for the 3.07 billion euro ($4.2 billion) deal to go ahead.
"B. Braun and Asklepios agree to maintain neutrality toward the sale and to refrain from taking any action against it," Fresenius said in a statement on Friday, adding that B. Braun would withdraw a lawsuit it filed to contest the deal.
Braun had been concerned that it would lose Rhoen as a major customer as a result of the sale. Unlisted hospitals chain Asklepios had also sought to block any deal between the two groups, fearing the emergence of a dominant rival.
Shares in Rhoen-Klinikum jumped on the news, reaching their highest level in a year and a half. They were up 5.8 percent at 21.55 euros by 1323 GMT, while Fresenius edged 0.3 percent higher to 111.649 euros.
Fresenius had tried to take over Rhoen last year but failed after B. Braun and Asklepios - which currently hold 15.08 percent and about 5 percent of Rhoen shares, respectively - blocked it.
In September, Fresenius agreed to buy about two thirds of Rhoen's assets in a deal it claims does not require shareholder approval.
The acquisition would add about 2 billion euros to Fresenius hospitals division Helios's annual sales of 3.2 billion, increasing its lead over unlisted rivals Asklepios and Sana and creating Europe's biggest private hospital operator.
B. Braun, which competes with Fresenius in hospital equipment such as intravenous and tube-feeding supplies, filed suit to try to halt the deal.
Under the agreement announced on Friday, Fresenius will sign a non-exclusive long-term supply agreement with B. Braun and vows not to give preference to its own supplier, Fresenius Kabi.
Meanwhile, Asklepios will be made a "founding partner" of the new hospital network created by the hospitals deal, alongside Fresenius and Rhoen.
Rhoen's chairman and founder Eugen Muench, who last year failed to overcome opposition from B. Braun and Asklepios to an outright sale of the company to Fresenius, said in a statement he welcomed the agreement.
"Following this rational step I am confident that the company's strategy for handling extraordinary profit from the transaction has a chance of winning the approval of shareholder B. Braun and Asklepios," he said.
Rhoen had said in September it would pay out a special dividend of up to 1.9 billion euros, or 13.8 euros per share, following the hospitals sale, on top of its regular dividend.
($1 = 0.7316 euros) (Reporting by Maria Sheahan; Editing by Harro ten Wolde and David Goodman and Jane Merriman)