Gas Natural is studying the acquisition of Unión Fenosa, Spain’s third biggest power company in deal that would create an integrated energy group worth about €30bn ($47bn), before divestments.

Spain’s principal gas distributor said on Thursday it had “begun talks ... about a possible acquisition” with ACS, the Spanish construction group which in effect controls Fenosa with a 45 per cent stake. However, Gas Natural said no agreement had been reached.