* E.ON to pay 850 mln reais ($471 mln) for stake
* Companies will develop 20 GW of capacity in Brazil, Chile
* Move gives E.ON exposure to Latin America market
* E.ON shares down 0.5 percent, MPX down 3.3 percent (Recasts, adds details from conference call, background)
By Christoph Steitz
FRANKFURT, Jan 11 E.ON said it will buy a 10 percent stake in Brazil's MPX Energia, only weeks after losing a bid for a stake in Portugal's EDP , as the group struggles to tap new markets following Germany's move to exit nuclear power.
E.ON will pay about 850 million reais ($471 million) for the stake as part of a 1 billion reais capital increase at MPX. The transaction is expected to close in the second quarter of 2012, E.ON said.
Both companies will develop 20 gigawatts (GW) of capacity in Brazil and Chile in a 50-50 joint venture, which will also be responsible for the thermal and renewable energy projects in both countries.
"For us it was the perfect marriage," Eike Batista, Brazil's richest man and in control of MPX, told journalists during a conference call.
The move, flagged by Reuters on Tuesday, gives E.ON access to Latin America's biggest economy where electricity demand is growing at a rate of almost 5 percent a year, or 10 times faster than in Germany.
Batista did not give a specific number for how much the companies would invest to arrive at the 20 GW of capacity but added as a rule of thumb 1 GW would translate into $2 billion.
"In the joint venture (however) it could be different," E.ON Chief Executive Johannes Teyssen said, adding the aim was for the joint venture to be profitable from the start.
"This is not a game changer. The business for new production capacities in Brazil is heavily regulated, which means limited upside or downside," WestLB analyst Peter Wirtz said.
"If it goes well, E.ON improves its risk-hedge. If it goes badly (e.g. currency risks), I'm not quite sure how that can be hedged," he said.
According to the United Nations' International Atomic Energy Agency, total electricity consumption in emerging markets should more than triple by 2030, rising to 43 percent of world demand from 27 percent now.
German utilities, including E.ON and RWE, have been looking for ways to balance out the decision by German Chancellor Angela Merkel to scrap nuclear power production permanently after last year's Fukushima crisis in Japan.
The company suffered a significant setback last month when losing a bid for Portugal's stake in EDP to China Three Gorges, a move which would have given it access to the Brazilian market.
Troubles in its home market will likely lead E.ON -- whose shares were down 0.5 percent at 16.78 euros by 1411 GMT -- to report for its business year 2011 its first annual net loss. MPX shares, traded in Sao Paulo, fell by 3.3 percent to 47.40 reais per share, dropping for a second day.
($1 = 1.8049 Brazilian reals) (Additional reporting by Joshua Schneyer in Rio de Janeiro; Editing by Jon Loades-Carter and Greg Mahlich)
Our top photos from the last 24 hours.