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Exclusive: China's Fosun in talks to buy commodity broker Marex Spectron - sources

Reuters  |  LONDON 

By and Pratima Desai

(Reuters) - Chinese Ltd is in discussions to buy British-based Spectron, two industry sources said.

The deal to buy privately-owned would expand the portfolio of Fosun, one of China's most acquisitive overseas dealmakers, in both and commodities, of which is the world's largest consumer and

Fosun already owns iron ore, and companies.

Fosun declined to comment.

A for said: "is a profitable and successful and such speculation isn't new. We don't comment on such rumours."

The sources said discussions have been ongoing for several months, with an announcement expected before the end of September. The price was not immediately known.

Marex has been for sale for several years, sources said, as its private equity owners sought an exit from their investment. and its partners and bought a majority stake in the in 2010.

Marex, one of the world's largest in the commodities sector, was formed from the merger in 2011 of Marex Financial and

Surging commodity volumes so far this year make this an good time to sell, industry sources said.

Several brokers have benefited from the volatility in industrial metals after U.S. sanctions were imposed on Russian Rusal, with average profits rising about 30 percent, Metal Exchange (LME) members told a poll in June.

Marex is one of nine firms trading on the open outcry floor of the LME, owned by and Clearing Ltd.

With two other LME ring-dealing firms owned by Chinese parents - and CCBI Metdist - the deal would mean that a third of the top-tier LME members are Chinese owned.

posted pre-tax profit of $17.7 million last year, up 30 percent from $13.6 million in 2016. Revenue rose 5 percent to $199.1 million.

In July, assigned a BBB- long-term credit rating and a "stable" outlook to the broker. In May, it increased its working capital facility to $125 million from a consortium of banks.

Headquartered in and also present in and Asia, Marex Spectron's main brokerage businesses are agricultural products, energy, base and precious metals.

Hong Kong-listed Fosun, co-founded by Chinese billionaire Guo Guangchang, has a sprawling portfolio that includes health, financial and leisure firms such as

Its financial sector companies include Portugal's largest company Fidelidade, that country's biggest listed Banco Comercial Português as well as German Hauck & Aufhäuser.

Fosun's portfolio also includes Haian Mining, the parent of & and Australian upstream firm Roc

Last month, Fosun posted a 17 percent rise in first-half net profit to 6.86 billion yuan. It has a market value of HK$112 billion.

(Additional reporting by in Hong Kong; Editing by and David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, September 12 2018. 21:15 IST