JPMorgan Chase has entered exclusive talks to buy the RBS Sempra commodities joint venture, people familiar with the matter said on Wednesday, in a deal expected to be worth about $4 billion.
JPMorgan, Deutsche Bank and Australia's Macquarie had each submitted offers worth nearly $4 billion for the RBS Sempra unit by an early January deadline.
JPMorgan and Deutsche Bank were seen as the front runners, but the latter was no longer in the running, sources said.
JPMorgan was willing to pay a higher price for the business, sources said, although details of the likely purchase price were not immediately known.
One source said RBS was also keen for a quick transaction and due diligence process.
RBS Sempra is 51 percent owned by Royal Bank of Scotland, which has been forced by European regulators to sell its stake. Sempra Energy is also set to sell its 49 percent stake in the deal.
RBS, JPMorgan and Deutsche Bank declined to comment and RBS Sempra could not immediately be reached.
RBS Sempra trades commodities ranging from oil and natural gas to metals and agricultural products and would provide JPMorgan the opportunity to add to its existing commodities business to challenge market leaders Goldman Sachs, Morgan Stanley and Barclays Capital.
New York-based JP Morgan has picked up assets and market share after weathering the financial crisis better than most rivals. It last week reported a fourth-quarter profit of $3.3 billion, fueled by strong investment banking.
RBS Sempra was formed in 2008 when RBS bought its controlling stake for $1.7 billion and California utility Sempra Energy invested $1.6 billion.
© 2022 Thomson/Reuters. All rights reserved.