JP Morgan to buy RBS Sempra's assets for $1.7 bn

US banking major JP Morgan today said it will acquire the global oil, metals and European energy business of RBS Sempra Commodities (RBSSC), for an estimated $1.7 billion.

RBSSC is a joint venture between British banking giant RBS and California-based Sempra Energy.

Subject to regulatory approvals, the transaction is expected to close in the second quarter of 2010, JP Morgan said in a statement.

These assets will be integrated into JP Morgan's existing Global Commodities business, led by Blythe Masters.

"JP Morgan is expected to pay $1.7 billion subject to distributions prior to closing. The assets will be purchased for cash, all payable at closing, and are expected to contribute a profit immediately upon closing," the statement noted.

In a separate statement, RBS said the proceeds from the sale would be used to repay short-term borrowings.

"The remaining assets in RBSSC, namely the North American Power and Gas businesses, remain of high value and are performing well.

"Along with our JV partner, Sempra Energy, we continue to actively consider various ownership alternatives for the remainder of RBSSC," RBS Group Finance Director Bruce Van Saun said.