Sept 11 (Reuters) - Spanish power utility Iberdrola

has bought a 30.29% stake in its Brazilian business

Neoenergia 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.