JP Morgan has sold its physical commodities business to trading house Mercuria, for US$3.5bn.
The bank says in a statement that it will continue to provide traditional banking services to the commodities markets, continuing to provide liquidity and risk management to those in the sector.
It marks the biggest acquisition that trader Mercuria has made since starting out 10 years ago and will mean the firm’s search for an equity investor has been put on hold.
Mercuria posted revenues of US$100bn in 2012, with profit of US$343mn. The fact that so few details have been released about the purchase, however, will doubtless raise further clamour as to the secretive nature of commodity traders, many of which have no requirement to make their finances public.
Blythe Masters, head of JP Morgan’s global commodities business, says: “Our goal from the outset was to find a buyer that was interested in preserving the value of JP Morgan’s physical business. Mercuria is a global leader in the commodities markets and an excellent long-term home for these businesses.”
Marco Dunand, CEO of Mercuria, adds: “This transaction represents a major step in the development of Mercuria. The market professionals at JP Morgan commodities are amongst the most highly-regarded in the industry. The opportunity to integrate them in Mercuria’s global existing business will reinforce our group’s leading position in the energy and commodities markets.”