Business

Morgan Stanley in talks to sell commodities business

Morgan Stanley’s talks to unload its commodities business are heating up against after months of fruitless negotiations with potential buyers.

The bank is said to be in talks with Russian trading outfit Rosneft for its volatile commodities platform, which it has been trying to sell for more than two years, sources told The Post.

The story was first reported on industry trade site Spark Spread.

Talks between the Rosneft and Morgan Stanley are said to be in advanced stages but could still fall apart. A Morgan Stanley spokesman declined to comment.

The tie-up between Morgan Stanley and Moscow-based Rosneft could face political hurdles even if a deal is reached in principle, Spark Spread reported.

Specifics on possible deal terms, including price and structure, could not be learned.

The bank, run by CEO James Gorman, has explored a number of ways to allay costs at its cash-intensive commodities unit, including a joint venture and a spin-off.

Last year, Morgan Stanley held talks with Qatar’s sovereign wealth fund about a joint venture but a deal never materialized.

Once a big money-maker, Morgan Stanley’s commodities business, which trades everything from metals to crude oil, has become a drag in light of new regulations that make it more expensive to own and operate.

Making matters worse, regulators at the Federal Reserve have placed more scrutiny on big banks owning proprietary commodities platforms.

Other big banks are also looking to dump their commodities businesses.

Goldman Sachs, which faced accusations that it was manipulating markets through its metal warehouse network, also explored a sale of the unit.

Last month, JPMorgan launched an auction after announcing in July that it planned to sell its proprietary commodities business run by Blythe Masters.