Royal Bank of Scotland PLC said Tuesday that its joint-venture commodities unit RBS Sempra Commodities has sold its metals, oil and European energy businesses to investment bank J.P. Morgan for $1.7 billion.
RBS, which is 84 percent owned by the British government, will get 47 percent of the sale price, and expects to report a small gain on the deal, it said.
Sempra Energy said it expected its share of the sale to be about $940 million.
J.P. Morgan said the acquisition would be integrated into its existing Global Commodities business.
"We believe we have struck a fair price and contract with J.P. Morgan," said Bruce Van Saun, RBS' group finance director.
"The remaining assets in RBSSC, namely the North American power and gas businesses, remain of high value and are performing well. Along with our joint-venture partner, Sempra Energy, we continue to actively consider various ownership alternatives for the remainder of RBSSC."
Sempra Energy, based in San Diego, California, and RBS formed the joint venture in April 2008.
RBS agreed in November to divest RBS Insurance, Global Merchant Services and its interest in RBS Sempra Commodities as a condition for joining the British government's asset protection scheme to insure the company against losses on toxic assets. It was also obliged to sell within four years its RBS branch network in England and Wales, and NatWest branches in Scotland.
The agreement did not set a deadline for the disposals.
Sale of the RBSSC assets, subject to approval by British, U.S. and Swiss regulators, is expected to be completed in the second quarter, Sempra Energy said.
The North American energy business of RBSCC remains up for sale, said RBS spokesman Piers Townsend.
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