UPDATE 1-Vattenfall considers sale of European assets- sources
* Advisers finish strategic review of the assets -sources
* May wait for Sweden's September elections before sale
* Faces uphill struggle to find buyers
FRANKFURT, Nov 28 (Reuters) - Swedish utility Vattenfall is considering the sale of its Continental Europe and UK operations next year to focus on its home market and reduce debt, four people familiar with the situation said.
Vattenfall's advisers, Citi and Rothschild, have finished a strategic review of the assets, two of the people said, speaking on condition of anonymity. They expected the two banks to start talking to potential buyers from early 2014.
Vattenfall is state-owned, and the Swedish parliament would have to decide on a sale.
"We have no plans to sell our Continental Europe and UK business," a Vattenfall spokesman said.
A spokeswoman for the government said, "Vattenfall has said that they will consider risk-sharing for the non-Nordic parts of the company. We shall analyse this carefully, and if needed we shall seek a broad support in parliament."
Scandinavia's biggest utility is under pressure at home to retrench to its better-performing Scandinavian markets after being wrong-footed by a prolonged economic downturn across much of Europe and a drive in Germany towards renewable energy.
Its European acquisitions have saddled it with 158 billion Swedish crowns ($24 billion) in debt and led to major writedowns.
Vattenfall said in July it would split into two units - one for Sweden and one for the rest of Europe - by the end of 2013 in what was seen as a first step towards divesting the latter.
The split-up will take time and is likely to make little progress before the general elections in Sweden in September, the two other sources said.
"Vattenfall needs to do its homework tidily. It makes no sense to do the second step (the sale) before the first (reorganisation)," one of them said.
Scandinavia's biggest utility spent around 22 billion euros ($30 billion) on acquisitions over the past 15 years, trying to catch up with bigger rivals such as Germany's E.ON and France's EDF.
Vattenfall has already started an auction for a British wind park, two people familiar with the matter said earlier this week.
Bankers said it would be difficult to find a buyer for the whole Continental Europe and UK business or even just large parts of it at an acceptable price.
Vattenfall's European business accounted for about two-thirds of its 167 billion crowns of sales last year but less than 10 percent of its earnings before interest and tax (EBIT) of 26 billion crowns.
While other utilities are also grappling with a gloomy outlook and high debt levels, they are unlikely to make big acquisitions.
That could leave Vattenfall relying on interest from private equity infrastructure funds such as GIP and Macquarie as potential buyers for many of its assets.