Shares of Spanish energy firm Repsol YPF fell sharply after Argentina said it is to nationalize the company's majority stake in Argentine oil and exploration unit YPF.

Repsol YPF SA shares sank 6.2 percent Tuesday morning in Madrid to 16.34 euro ($21.28) each, underperforming the benchmark Ibex index, which was up around 0.5 percent.

Repsol's president Antonio Brufau is accusing Argentina of mounting a concerted effort to drive down the value of the South American division to expropriate it at a "bargain" price.

Brufau says the company will mount a legal fight against the nationalization bid. Spain's government is also defending Repsol amid deteriorating relations with Argentina.

Brufau says YPF is worth $18.3 billion, and he valued Repsol's stake at $10.5 billion.