Exclusive: Goldman puts Metro metals warehousing unit up for sale

Tue May 20, 2014 4:15pm EDT
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By Josephine Mason

NEW YORK (Reuters) - Goldman Sachs (GS.N: Quote) has begun a formal process to sell the metals warehousing business it purchased four years ago, a spokesman said on Tuesday, disclosing the first definitive effort to shed the operation amid regulatory and political pressure.

The Wall Street firm, one of the few major global banks that has not retreated from commodity markets in recent months, decided to explore a sale after receiving interest from potential buyers, the spokesman said in an email to Reuters.

The bank looks to hive off the most contentious part of its commodities business, but there is no sign it is backing away from the J Aron franchise it bought three decades ago and built into one of Wall Street's biggest commodities traders.

The bank contacted possible bidders about buying Detroit-based Metro International Trade Services on Monday, a source familiar with the matter told Reuters on Tuesday.

A second source said the bank had approached his company informally about a potential sale.

The discussions suggest Goldman is making a clear effort to move forward after a year of on-and-off talks over the fate of Metro, a cash cow for the bank amid soaring global metal inventories but a business that has more recently become the focus of lawsuits, regulatory scrutiny and public outrage.

The identity and number of possible Metro bidders contacted by Goldman is not known, but one of the sources said they included other banks, merchants and warehousing companies inside and outside of the United States. Goldman purchased Metro for some $550 million four years ago.

"They've got people they're approaching. They've never gone out and approached anyone before," said the person, adding that the approaches were made on Monday.   Continued...

A Goldman Sachs sign is seen over their kiosk on the floor of the New York Stock Exchange, April 26, 2010. REUTERS/Brendan McDermid