NEW YORK, May 17 (Reuters) - Spanish utility Iberdrola

said on Friday it is nearing a deal to acquire the

remaining 18.4% stake in its U.S. subsidiary Avangrid ( AGR )

that it does not already own for about $2.6 billion.

The agreement would come after Avangrid ( AGR ) abandoned in January

a $8.3 billion deal to acquire U.S. competitor PNM Resources ( PNM )

because it failed to secure approval from New Mexico's

utility regulator more than three years after first announcing

the plan.

The Iberdrola statement confirmed an earlier Reuters

story saying that Iberdrola was in advanced talks to pay $35.75

per share for the Avangrid ( AGR ) shares it does not own, citing people

familiar with the matter who spoke on condition of anonymity.

Iberdrola confirmed the terms being discussed in a

statement, and cautioned the agreement has been in principle

thus far, and is not yet binding. It said the deal would

increase its exposure to its U.S. business, which it is seeking

to grow.

The deal price is below the $37.53 level at which the stock

ended trading on Thursday. Avangrid's ( AGR ) stock dropped 5.3% to

$35.54 in pre-market trading on the initial Reuters story before

its trading was suspended.

Avangrid ( AGR ) did not immediately respond to a request for

comment.

Iberdrola, one of Europe's largest power companies, said in

March it would offer $34.25 per share to buy out the remainder

of Avangrid ( AGR ). The price represented at the time a premium of

approximately 10% to the weighted average share price of

Avangrid ( AGR ) in the preceding 30 days.

Avangrid ( AGR ) operates renewable power assets in 24 states,

and also serves 3.3 million customers in New York and New

England through regulated utility operations, per its website.

It began trading as an independent company in December

2015, following the merger of Iberdrola USA and UIL Holdings

Corporation.

Iberdrola

said

in March it plans to invest 41 billion euros ($44.57

billion) over the next three years, with a focus on upgrading

and expanding power grids in the United States.

($1 = 0.9199 euros)