Spain is the world's largest olive producer and national food giant Deoleo is the world's biggest seller of the liquid gold.
But the food giant which notched up revenues of around €800 million ($1,100 million) in 2013 could soon become prey to an Italian fund, Spain's El Mundo newspaper reported on Wednesday.
Deoleo's major shareholders, including several cash-strapped Spanish banks, are looking to offload 31 percent the food group.
Among the buyers sniffing around the deal is the Italian Strategic Fund (FSI), a state-backed sovereign fund. In early March the group said it had made a non-binding offer for a 30 percent stake in the Spanish group.
News of the possible sale hasn't gone down particularly well in Spain.
The country's left-wing Izquierda Unida party say such a move could see Spain's olive oil production lose its "Spanishness" and go into the hands of its "greatest competitor" in the sector.
A sale to FSI could also see smaller Spanish providers lose out to Italian business interests, a spokesperson for the party said, also pointing out that those banks selling off Deoleo had previously received State rescue money.
Spain's agricultural ministry is also getting jittery. "Deoleo is a key company in our oil production and should remain intact, with headquarters in Spain," sources in Spain's agricultural ministry told El Mundo.
The paper also says the Spanish government is hatching plans to stop an Italian buyout, bringing together a consortium of Spanish buyers able to put up a rival bid.
But the Italian fund involved in the deal says the purchase of a stake in Deoleo would be about bringing Italian brands home.
The stated aim of FSI is to promote Italian brands globally and Deoleo currently owns major Italian labels Bertolli, Carapelli and Sasso.