JPMorgan keen to do $4bn deal for RBS unit

INVESTMENT giant JPMorgan Chase is in exclusive talks to buy the Royal Bank of Scotland Sempra commodities joint venture in a deal worth $4 billion (£2.5bn), according to sources.

The US investment bank, Deutsche Bank and Australia's Macquarie had each submitted offers for the RBS unit by a deadline that passed earlier this month. JPMorgan and Deutsche Bank were seen as the front-runners, but it is understood that the former is willing to pay a higher price for the business. One source said RBS was also keen for a quick transaction and due-diligence process.

RBS Sempra is 51 per cent owned by the Edinburgh-based bank. RBS, which is 84 per cent owned by the state, has been forced by European regulators to sell its stake. RBS, JPMorgan and Deutsche Bank all declined to comment.

RBS Sempra trades commodities ranging from oil and natural gas to metals and agricultural products. A deal would add to JPMorgan's commodities business to challenge market leaders Goldman Sachs, Morgan Stanley and Barclays Capital.

New York-based JPMorgan has picked up assets and market share after weathering the financial crisis better than most rivals. Last week, it reported a fourth-quarter profit of $3.3bn.

RBS Sempra was formed in 2008 when the bank bought its controlling stake for $1.7bn and California utility Sempra Energy invested $1.6bn. The operation is a big player in the London metals market, while its energy business is largely focused around US utility Sempra Energy.

Deutsche Bank said recently that it is aiming to be among the world's top five commodities firms, but it has stressed that it can achieve this organically.