According to the Financial Times, ACS paid E37 per share for the Iberdrola stake, valuing the deal, which the newspaper said was a ‘friendly’ move, at around E3.3 billion.

Reports are also suggesting that the deal is linked to rumors that Iberdrola and electricity generator Union Fenosa are considering a merger as ACS has a 35% stake in Fenosa.

Such a merger would make the combined company the biggest utility in Spain, knocking Endesa, which is itself in the middle of a takeover tussle, from its current perch at the top.

However, these press reports of a possible tie-up have been denied by Iberdrola, with a company spokesman stating that there is no merger agreement in place at the moment, according to AFX News.