UPDATE 2-Vattenfall to hold power grid sales talks

(releads, adds EU Commission)

By Vera Eckert

FRANKFURT, July 25 (Reuters) - Vattenfall Europe [VATN.UL] will go ahead with the sale of its high-voltage power grid in Germany and has lined up possible buyers in response to EU calls to ease access for competitors, the company said on Friday.

"Vattenfall Europe will approach potential investors for its transmission unit Vattenfall Europe Transmission (VET) over the next few days," Germany's fourth biggest utility said in a statement.

"The background to this decision is the months-long political debate about the separation of distribution network ownership from power production."

In Brussels, Energy Commmissioner Andris Piebalgs welcomed the move, saying it would help bring more competition and choice.

"Vattenfall's announcement is perfectly in line with the letter and the spirit of the Commission's third Energy Market Package, that we hope will be adopted during the French Presidency", said Piebalgs.

Vattenfall said it aimed to conclude the process in the first half of 2009, with Citigroup (C.N: Quote, Profile, Research) acting as agent for the transaction which might fetch 900 million euros ($1.41 billion).

The company, the German arm of the Swedish state-owned Vattenfall group, is following sector leader E.ON EONG.DE which surprised markets earlier this year with plans to sell its own high-voltage grid to appease the EU in a cartel case.