LONDON (MarketWatch) -- A Citigroup infrastructure fund is bidding 7.9 billion euros ($10.2 billion) to buy a Spanish highway operating firm, the firms said on Monday.

Citi Infrastructure Partners is buying most of Itinere Infraestructuras from Sacyr Vallehermoso (018287021), a Spanish construction group eagerly trying to shed debt as the Spanish housing market weakens.

The same company is in talks with Russia's Lukoil to sell a minority stake in oil group Repsol REP, +0.59% .

The deal sees the Citi fund assume 5 billion euros of debt and pay 2.87 billion euros of cash in a transaction that will slash Sacyr's debt load by as much as 37%.

The fund, in which Citi directly has about a 15% stake, is paying 3.96 euros per Itinere (013384801) share in a complex deal in which Sacyr also will buy back some highway concessions that are in a ramp-up phase.

The Citi fund is then going to sell some highways it's buying to Abertis Infraestructuras (011184501) and Atlantia (ATL) in a deal worth about 1 billion euros. Abertis is buying 621 million euros of highways in Spain and Chile, and Atlantia is buying 420 million euros of highways in Chile and Brazil.

Julie Ainouz, an analyst at Societe Generale, said Citi was playing a relative low price because Sacyr needed to make a quick sale.

"Despite tougher lending conditions, these various transactions show that investors are still interested in motorway concessions, but they also reveal pressure on transaction multiples in the sector," Ainouz said in a research note.

Itinere shares rose 14.5% to 3.86 euros.

Sacyr shares rose 4.4%, while Abertis shares weakened 2.8% and Atlantia slipped 2.2%.

In opening New York trade, Citi shares slumped over 10%.

Itinere operates 44 infrastructure concessions in seven countries, notably Spain, Portugal, Chile and Brazil. The group had a nine-month operating profit of 218 million euros on revenue of 478.6 million euros.

The move by the Citi C, -2.12% fund comes after a failed attempt with Abertis to run the Pennsylvania Turnpike. The fund also is actively involved in the airports sector.

Citi said they'll use the Itinere platform to invest in mature toll roads in developed economies.