The move comes amid increasing pressure from European countries over continuing use of capital punishment in the United States.

European companies are barred from selling drugs for use in executions, forcing states that still impose the death penalty to scrabble for alternative substances, some of which have led to widely publicised and gruesome botched executions.

The move by ABP, which had $416 billion in assets in 2014 according to consultancy Towers Watson, is thought to have been followed by other Dutch pension funds. The Netherlands has the world's largest pool of pension assets per capita, worth $1.2 trillion in 2012.

Harmen Geers, a spokesman for ABP, said the decision came after a nine-month dialogue with the company failed to achieve a satisfactory result.

"As the Dutch government and Dutch society as a whole renounced the death penalty a long time ago, we do not want Dutch pension money to be involved in that," he said.

The U.S-based but Dutch-registered company has a declaration on its website saying its products are not designed or intended for use in executions, but Geers said Mylan could do more to police their use.

The U.S. state of Virginia confirmed in response to a freedom of information request in July that it held stocks of Rocuronium Bromide, a Mylan-made drug that can be used to kill people.

Geers said it was this information that led to the decision to sell its Mylan holdings in full. "We thought we have only one step left to show our disapproval," he said.

ABP, the largest Dutch pension fund, held 9 million euros ($10 million) in the company before the divestment, down from 25 million euros last year when it first approached Mylan with its concerns.

Calls to Mylan were not immediately returned.

(Reporting by Thomas Escritt; Editing by Dale Hudson)

By Thomas Escritt