Mercuria resumes search for big investor

Mercuria is to resume its search for a major investor to help in the next stage of its expansion, the CEO of the Swiss commodity company said on Tuesday, raising the possibility of partnering with a private equity company with industrial experience.

Speaking at the FT Commodities Global Summit in Lausanne, Switzerland, Marco Dunand said Mercuria has now largely completed the integration of JPMorgan's physical commodities business, six months after the completion of the purchase of the bank's oil and metals assets propelled it into the top league of traders.

"What we're looking for is not so much an investor but a partner," Mr Dunand said.

"If a partner comes and takes an equity stake in the company allowing us to grow our business we would view that favourably. If we could find an industrialist type partner I think that would (also) have some attraction for us in order to grow."

Mr Dunand said this could include private equity firms that have expanded into energy and mineral extraction and refining industries.

The announcement that Mercuria would consider twinning-up with a private equity firm with commodity exposure follows the company's rapid expansion from its small trade house roots.

Launched just 11 years ago after former Goldman Sachs and Cargill traders Mr Dunand and Daniel Jaeggi bought a stake in a company focused largely on supplying Russian crude to Polish refiners, Mercuria quickly expanded in Europe and Asia to have turnover of $112bn in 2013.

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Mr Dunand said the firm now gets around a third of its income from North America following the JPMorgan deal, which included the purchase of oil storage tanks, supply and marketing agreements with a major US oil refinery, and the Henry Bath metals warehousing business.

"We were under-represented in this area before," Mr Dunand said, adding that the integration was around 70 per cent complete.

Mr Dunand first announced the firm was looking for an investor to take up to a 20 per cent stake in the company in 2013, but put the search on hold as it focused on the JPMorgan acquisition.

The sharp drop in oil and other commodity prices since last summer has sparked talk trading firms may move to buy more oil and mining firms, continuing a trend for many to try and augment their trading operations by becoming involved with production and refining, though Mr Dunand said valuations in the US were still relatively high.

Mercuria has separately looked at the possibility of an investor taking a major stake in the Henry Bath metals warehouse business.

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