Freepoint Commodities to Buy JPMorgan’s Metal-Concentrates Unit

Freepoint Commodities LLC, founded last year by three former RBS Sempra Commodities LLP executives, agreed to buy JPMorgan Chase & Co. (JPM)’s metal-concentrates trading arm, marking the company’s first foray into the market.

The energy-trading company based in Greenwich, Connecticut, signed an agreement to buy J.P. Morgan Metals & Concentrates LLC, which trades concentrates and copper cathodes. The terms are confidential, David Messer, Freepoint’s chief executive officer, said in a phone interview from Stamford, Connecticut yesterday.

Global metals demand is rising as China, the world’s largest user, builds more infrastructure, housing and consumer appliances. The LMEX Index (LMEX), which tracks six base metals traded on the London Metal Exchange, has risen 5.5 percent this year.

The J.P. Morgan Metals traders, based in Stamford and China, including Hong Kong, will become Freepoint’s first in metals and will probably be its first in Asia, where it’s looking to tap into the growing demand for raw materials, Messer said.

Messer said that the acquisition is a “reunion” because he worked with the team of about 25 traders from the time Sempra bought the unit in 2002 until he resigned as RBS Sempra’s chief executive officer in 2009.

“Concentrates is a business we’re very familiar with since we worked with them for almost a decade,” Messer said. “Historically, the unit was considered one of the top three players in the concentrates market, and I expect it to grow in stature over time now that its future is determined.”

Brian Marchiony, a spokesman for JPMorgan in London, declined to comment.

Asian plans

Freepoint has expanded operations in Europe, entered U.S. power and natural-gas markets in June and said earlier this year that it was planning to establish offices in Asia to trade metals, oil and refined-petroleum products and coal.

The company is in the process of acquiring businesses in Singapore, Dan Hecht, Freepoint’s general counsel, said in a telephone interview yesterday from Greenwich, Connecticut.

Once the acquisition of J.P. Morgan Metals receives regulatory approvals and is complete, the name of the company will change to Freepoint Metals & Concentrates LLC, Hecht said.

Glencore International Plc (GLEN) and Trafigura AG are also major players in the concentrates market, Messer said.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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