Repsol has agreed to sell its 20 per cent stake in Spanish utility Gas Natural to private equity group CVC in a deal that is likely to prompt a shake-up in the Spanish energy market.

The €3.8bn deal leaves Repsol with a huge amount of cash on its balance sheet that it is expected to use to try and compete in the Spanish retail energy market, as well as for share buybacks.

Another player muscling into Spain’s retail market would represent a new upheaval for the sector, which is still reeling from attempts last month by the government to lower the regulated prices.

The sale also points to the continued unwinding of the complex web of cross-shareholdings that have long marked Spain’s corporate scene.

In 2016 Repsol and Criteria Caixa, the holding company that owns Caixabank, agreed a near-€4bn deal to each sell a 10 per cent stake in Gas Natural to Global Infrastructure Partners.

Caixabank holds 24 per cent of Gas Natural.

For Repsol, the decision to sell also comes as a 40 per cent rally in Brent crude since June — driven by rising demand, tightening supplies and geopolitical concerns — has fuelled a surge in profits at international oil groups.

Josu Jon Imaz, Repsol’s chief executive, told the FT last year that he expected Repsol to be in a position for its board to consider improving “the remuneration of our shareholders” through buybacks in the “first part of 2018”.

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