//Macquarie to buy Cargill’s oil business; traders see logic in deal – Oil

Macquarie to buy Cargill’s oil business; traders see logic in deal – Oil

Australia’s Macquarie Group has agreed to buy Cargill’s oil business
for an undisclosed amount, the companies said Thursday.

“Cargill Petroleum consists of a very experienced team of oil industry
professionals,”said Nick O’Kane, global head of energy markets at Macquarie
in a statement put out by both companies. “This acquisition represents an
exciting step for our business, bringing greater reach to the Macquarie
platform and positioning us for continued growth.”

The move expands Macquarie’s global footprint in oil trading.

Cargill Petroleum trades both crude and products out of offices in
Geneva, Houston, Minneapolis, Shanghai and Singapore. Macquarie’s US team
works out of Houston.

Cargill, which is US’ largest privately held company, will continue to
offer financial risk management to the oil industry, petrochemical industry as
well as natural gas, power and agriculture and metals. Cargill, whose
Minneapolis office is in the middle of the corn belt, will remain active in
biofuels, the statement said.

Traders were not surprised by Cargill’s exit from US physical crude and
product markets markets, they said. Once a powerhouse in these markets, their
activity there has been declining.

“Cargill has become less and less active so assume if they can get
anything out of it, selling it [the petroleum business] would be good for
Cargill,” said one US gasoline trader.

Macquarie, on the other hand has been more active in the physical
markets and is looking for a place to invest money with good returns, traders
said.

“Macquarie just looking for something with return, and they’re hoping
Cargill can provide it,” said one oil trader. “They’ve been looking for over a
year now to get more into crude oil and products trading.”

–Janet McGurty, janet.mcgurty@spglobal.com

–Edited by Richard Rubin, richard.rubin@spglobal.com

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