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Morgan Stanley-Rosneft Deal Wins U.S. Antitrust Approval

Morgan Stanley’s proposed sale of its oil merchanting business to Russia’s OAO Rosneft won antitrust approval in the U.S., regulators said.

The Federal Trade Commission announced the approval on its website in a notice dated yesterday. The transaction still needs approval from the Committee on Foreign Investment in the U.S., an inter-agency panel that examines acquisitions of companies by foreign investors for national security concerns.

The two companies probably will wait until political tensions between Russia and the U.S. cool before seeking approval from CFIUS, a person familiar with the matter said in April. Reviews by CFIUS can last up to 75 days. The U.S. government imposed sanctions in April on Rosneft’s chief executive officer, Igor Sechin.

The lack of hard assets such as pipelines should smooth the approval process if the political situation eases, said the person, who asked not to be identified because the process isn’t public. Morgan Stanley (MS) CEO James Gorman said last week that he expects the deal to be completed in the third quarter.

Mark Lake, a spokesman for New York-based Morgan Stanley, declined to comment on whether the firm had submitted the deal for CFIUS approval, as did a press official for Rosneft who asked not be identified. Holly Shulman, a spokeswoman for the U.S. Treasury Department, also declined to comment.

Morgan Stanley, which agreed in December to sell the unit to Moscow-based Rosneft, is divesting physical oil businesses to boost returns in its trading unit and avoid increased regulatory scrutiny. The firm also agreed earlier this month to sell its stake in TransMontaigne Inc., an oil-transportation company, to NGL Energy Partners LP.

To contact the reporters on this story: Michael J. Moore in New York at mmoore55@bloomberg.net; David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Christine Harper at charper@bloomberg.net; Sara Forden at sforden@bloomberg.net Joshua Gallu

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