Iberdrola buys Brazil energy firm for $2.4 bn

Spanish electricity group Iberdrola said Thursday it will pay $2.4 billion (1.8 billion euros) to acquire Brazilian energy company Elektro from Britain’s Ashmore Energy International.

Iberdrola said Elektro posted a 2009 net profit of 216 million euros and the deal, to be completed in cash, will have a immediate positive impact on earnings.

Elektro supplies electricity mainly in the Sao Paolo region and is ranked ninth in Brazil.

Reports said the deal is the biggest for Iberdrola since the company paid 6.4 billion euros to for US group Energy East in 2008. A year earlier it paid 17.14 billion euros for Britain’s Scottish Power.

Iberdrola said the Elektro deal forms part of its strategy to increase its presence in growing countries and markets, reducing its dependence on Spain.

It said it plans eventually to fold Elektro into Brazil’s Neoenergia, in which Iberdrola holds a 39 percent stake.