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J.P. Morgan to Sell Commodities Business for $3.5 Billion

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Last Updated: Dec 3, 2016

U.S. investment bank JPMorgan Chase aforesaid Wed it’s in agreement to sell its physical commodities business to Mercuria, catapulting country trade house into the highest tier of commodities traders.The price tag for the all-cash dealings, that is anticipated to shut within the third quarter, is $3.5 billion.

JPMorgan aforesaid it sees no material impact on earnings as a results of the deal.In Feb, Reuters according that Mercuria, light-emitting diode by 2 former Emma Goldman Sachs executives, became the contender to shop for the physical commodities unit, one among the foremost powerful oil and metals desks on Wall Street.

JPMorgan set to sell its multibillion-dollar physical commodities division last year owing to rising restrictive and political pressure so it might target the bank’s core business of loaning.The bank went into exclusive talks with Mercuria in Feb. within the final weeks, the trade house had been competitor with Australian bank Macquarie Group and private equity manager Blackstone Group to shop for JPMorgan’s unit, sources had said.

Private and gently regulated commercialism homes have benefited most from a significant retreat by banks from commodities commercialism over the past 2 years.Companies like Glencore and Russian oil major Rosneft employed whole groups of traders from banks like Morgan Stanley, however Mercuria can become the primary commercialism house to soak up a complete physical division from a bank.

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