Spanish utility Iberdrola has entered into an agreement to acquire Brazilian electricity distribution company Elektro for $2.4bn.

The transaction, agreed with current owner Ashmore Energy International (AEI), is pending approval from the Brazilian electricity regulatory agency ANEEL.

The acquisition, which will be earnings per share accretive in the first year, will be paid for in cash.

Iberdrola said that the acquisition is consistent with its current strategy of diversifying its geographical presence and reinforcing regulated business.

This strategy has also been reflected in divestment of non-strategic assets during 2010, including US gas subsidiaries in Connecticut and Massachusetts and other assets in Chile and Guatemala, the company said.