March 9 (Reuters) - Italy's largest regional power

utility A2A said on Saturday it has signed a

1.22-billion euro ($1.3 billion)agreement with utility Enel

subsidiary e-distribuzione for electricity

distribution networks in Lombardy.

The agreement provides for the formation of a newly

incorporated company to which e-distribuzione will contribute

its electricity distribution assets in the province of Milan and

and Valtrompia, A2A said, adding that it will hold 90% of this

entity.

Upon completion of the sale, A2A said that the firm and

e-distribuzione will also enter into a shareholders' agreement

for call and put options on the remaining 10% stake.

The deal will increase the number of A2A's installed

electrical point of deliveries by approximately 70%, from about

1.3 million in 2023 to about 2.1 million, the company said.

In a separate statement, Enel - the country's largest

utility - said that the transaction is expected to generate a

positive effect on its 2024 consolidated net debt of about 1.2

billion euros and a positive impact on the group's 2024 reported

net income of about 1 billion euros.

($1 = 0.9143 euros)

(Reporting by Kanjyik Ghosh and Angela Christy in Bengaluru;

Editing by Sam Holmes and Emelia Sithole-Matarise)