UPDATE 2-GDF and Acea reach deal on Italian jv

* GDF to strengthen power generation presence in Italy

* Deal positive for Acea to tune of 230 million euros

* Acea to get power supplies from GDF

* Deal will not change Acea shareholding structure (Adds background)

MILAN, Sept 16 (Reuters) - Italian utility Acea has reached an agreement with France's GDF Suez over their Italian joint venture which will strengthen the French group's power generation presence in Italy, the companies said in a joint statement on Thursday.

Acea and GDF said that under a preliminary agreement the French group would take control of all the power generation assets in the venture, except for hydroelectric assets and two power plants in Rome.

GDF, which will hold the trading activities of the venture, will also increase its stake in generation company Tirreno Power to 50 percent from 35 percent, the companies said.

Acea, controlled by the city of Rome, will take full control of the venture's power sales business and will have an option to underwrite a power supply contract with GDF to Sept. 30, 2016.

GDF, Italy's third-biggest gas operator, had once been keen to extend the power venture with Acea to gas before relations between the two worsened.

"The Italian market is fundamental for the development of the group which intends to continue investing in all energy sectors," GDF Chairman Gerard Mestrallet said in the statement.

GDF, Italy's fifth power generator, will see its installed capacity in Italy rise to 4,400 megawatts from 3,700 megawatts.

The deal will be financially positive for Acea to the tune of around 230 million euros due to a net cash-in and debt deconsolidation, Acea said in a statement of its own.

Under the deal, Acea's pro forma net debt at the end of 2009 is reduced by some 11 percent while its core earnings are reduced by about 4 percent, Acea said.

A source, who had earlier confirmed the deal, said the cash component for Acea was worth 50 million euros. [ID:nWEA8515]

The deal, which the two parties hope to complete before the end of the year, will have no impact on the shareholding structure of Acea in which GDF owns 10 percent, Acea said.

The two utilities said they intend to strengthen their cooperation in the water and environmental services sector. (Reporting by Stephen Jewkes and Stefano Bernabei)