(Photo by kricav / Flickr)
UPDATE, 3/20/14, 1:35 p.m. EDT: The names of Simpson Thacher attorneys working on the deal have been added in the final paragraph.
Privately held Swiss trading house Mercuria Energy Group has agreed to buy J.P. Morgan Chase’s physical commodities trading unit in a deal worth $3.5 billion.
The transaction—which is expected to close in the third quarter of the year, pending regulatory approval—has been in the works since J.P. Morgan announced last summer that it was exploring strategic options for the unit, which trades in such commodities as metals and oil. The bank’s need to shed the unit stems from the recently passed Volcker rule’s restrictions that limit banks’ commodities trading activities, according to The New York Times. J.P. Morgan said in its announcement of the sale that it does not expect the deal to affect earnings.
The Times also profiled Mercuria Wednesday in an article covering the origins of the trading house, which was founded in 2004 by former Goldman Sachs traders Marco Dunand and Daniel Jaeggi. The company, which is focused on oil trading, has grown into one of the world’s largest independent commodity traders with $98 billion in turnover in 2012, according to the Mercuria website.
For legal advice on the deal, Mercuria has turned to in-house attorney Mark Greenberg and a team of Cadwalader, Wickersham & Taft attorneys that includes Houston-based corporate partner Robert Stephens and New York–based corporate partner Ira Schacter, as well as corporate special counsel Aly El Hamamsy. Regulatory partner Gregory Lawrence, tax partner Richard Nugent, commodities partner Daryl Rice and antitrust partner Jonathan Kanter are also working on the deal.
As it happens, Cadwalader has ties on the other side of the deal. Last year, the firm recruited James Woolery, the former cohead of J.P. Morgan Chase’s North American M&A group and a former Cravath, Swaine & Moore partner. Woolery is currently Cadwalader’s chairman-elect and cochair of the firm’s corporate group.
Simpson, Thacher & Bartlett is representing J.P. Morgan on the deal with a team led by New York-based corporate partners Lee Meyerson and Brian Chisling. Simpson Thacher frequently advises the bank on various corporate matters. Last month, the firm represented J.P. Morgan in its role as financial adviser to Forest Laboratories, which was sold to Actavis in a $25 billion deal.
Simpson Thacher tax partner Robert Holo, compensation and benefits partner Brian Robbins, IP partner Lori Lesser and credit partner J.T. Knight are also working on the deal along with environmental senior counsel Michael Isby, derivatives senior counsel Jonathan Lindabury, antitrust senior counsel Michael Naughton and IP transactions counsel Joshua Walker. Associates on the deal are Solomon Bashi, Mark Chorazak, Genevieve Dorment, Elizabeth Muscarella, Erik Ping Wang, Douglas Tang, David Teigman, Jason Vollbracht and Samuel Warfield.