Exclusive: Marubeni set to cut Gavilon energy arm out of takeover

Fri Jun 7, 2013 4:59pm EDT
 
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By James Topham and Emi Emoto

TOKYO (Reuters) - Japanese trading house Marubeni Corp (8002.T: Quote) is in advanced talks to cut Gavilon's energy business out of its planned takeover of the U.S. commodity merchant, two sources with direct knowledge of the deal said on Friday.

The move comes as Marubeni works to finalize a $5.6 billion acquisition, including debt, of Gavilon and its core agriculture business in a deal that would propel it into the top ranks of global grain traders and allow it to tap rising Chinese demand.

But sources say the Japanese firm has little interest in taking on Gavilon's mid-sized energy operation, which is focused on oil, gas, and renewable fuels.

"The interest was always in the grains, not the oil," one source with direct knowledge of the Gavilon deal said, speaking on condition of anonymity. The talks could conclude as early as next week, one source said.

Gavilon's energy business could now join a list of mid-sized energy traders that are up for sale, including HETCO, the trading arm of oil firm Hess Corp (HES.N: Quote). Morgan Stanley (MS.N: Quote) has also looked at selling all or part of its energy-focused commodity division in the past year.

A Marubeni official declined to comment when asked about the plan to split the U.S. company. A spokesman for Gavilon in New York also declined to comment.

Omaha, Nebraska-based Gavilon's shareholders include investor George Soros, Dwight Anderson's Ospraie hedge fund, and Egypt's Orascom Construction Industries OCIC.CA.

BREAKUP   Continued...

 
A logo of Japanese trading house Marubeni Corp is seen on the company's headquarters in Tokyo May 29, 2012. REUTERS/Yuriko Nakao