Rosneft, Morgan Stanley terminate oil trading business sale agreement
MOSCOW. Dec 22 (Interfax) - Rosneft and Morgan Stanley had to terminate the contract to sell Morgan Stanley's Global Oil Merchanting business to Rosneft dated December 20, 2013 due to an objective impossibility to complete the deal that has arisen as a result of regulatory clearances being refused, Rosneft said in a press release.
"Having invested substantial efforts in the deal, the parties regret that it could not be completed. Despite this, the parties continue to cooperate in other spheres," Rosneft said.
Under their agreement, Rosneft was to receive the bank's oil trading business and a 49% stake in the company that operates a fleet of tankers. The deal also included an agreement on crude oil supplies and purchases, its transportation and storage and various investments in share equity.
Morgan Stanley has been examining opportunities to sell a portion of the crude oil business, because margins have fallen below 5%, the lowest of all its trading businesses. It would have relieved Morgan Stanley of roughly $4 billion in risk-weighted assets, allowing it to release associated reserves.
The European Commission had okayed the deal after concluding it would not restrict competition. The U.S. Federal Trade Commission also cleared the deal, after which Rosneft applied with the U.S. Committee on Foreign Investment (CFIUS).
