Iberdrola raises stake in Brazil's Neoenergia to 84% for $2.2 billion

Sept 11 (Reuters) - Spanish power utility Iberdrola IBE.MC has bought a 30.29% stake in its Brazilian business Neoenergia NEOE3.SA from Brazil's Previ pension fund for 11.95 billion reais ($2.21 billion), it said on Thursday.

The acquisition increases Iberdrola's stake in Neoenergia to 83.8%, it said. Neoenergia is Brazil's largest power utility in terms of customers.

The deal is a new step in Iberdrola's growth strategy based on the electricity networks business, in which it has 1.4 million kilometres (870,000 miles) of power lines in the U.S., Britain, Brazil and Spain, Iberdrola added.

Like other utilities, Iberdrola has focused on grid investments as it seeks steady returns.

JP Morgan analysts contrasted the Brazil deal with Iberdrola's decision to dispose of its Mexican assets for $4.2 billion. Iberdrola exited Mexico on concerns about the legal and tax stability.

"The company strengthens its position in a core country and exits a country where growth potential was questionable," the analysts said in a note.