Mercuria Said to Hire One JPMorgan Metals Trader as Deal ShrinksAndy Hoffman and Agnieszka Troszkiewicz
Mercuria Energy Group Ltd. is hiring just one JPMorgan Chase & Co. metals trader as the Swiss trading house pares back its purchase of the New York-based bank’s commodity unit, three people with knowledge of the matter said.
Jonathan Berchole will trade aluminum, nickel and tin for Mercuria in London, said the people, who asked not to be identified because the matter is private. Mercuria will pay about $800 million for part of the JPMorgan assets, less than the $3.5 billion cited by the bank when it announced the deal for the whole unit in March.
While Mercuria won’t buy most of JPMorgan’s metals business and inventories or its two crude-supply contracts for U.S. refineries, the bank still expects to recoup $3.5 billion for the commodities unit by selling assets to other parties, two people said.
Under pressure from regulators concerned about lenders owning, storing and trading raw materials, banks including JPMorgan, Barclays Plc and Deutsche Bank AG are withdrawing from or scaling back their commodity businesses. Independent trading houses such as Mercuria, which have less direct oversight by regulators, are filling the void.
Patrick Burton, a spokesman for JPMorgan in London, declined to comment.
Mercuria last month hired former Trafigura Beheer BV executive Tristan Busch to run its refined metals and concentrates business from Geneva. The company is looking to add copper traders in North America and Europe, one of the people said. The trading house’s metals business in China is managed by James Jian Wu.
JPMorgan’s contract to supply crude oil to the Philadelphia Energy Solutions refinery in Pennsylvania won’t be transferred to Mercuria, one of the people said.
A separate crude-supply agreement to a refinery in St. Paul, Minnesota, also won’t go to Mercuria, the plant’s owner, Northern Tier Energy LP, said in a regulatory filing last month.
Mercuria will secure JPMorgan’s gas and power trading operations in North American and Europe, the assets it most covets, one of the people said. It will also buy more than a dozen physical assets in North America, including about 6 million barrels of storage leases in the Canadian oil sands.
Mercuria, which has its main trading operations in Geneva, also gets Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England, which will be operated as a stand-alone subsidiary. Henry Bath was a founding member of the London Metal Exchange, and handles products that include aluminum, steel and copper as well as cocoa and coffee, according to its website.