JPMorgan Chase & Co. said Monday that it has agreed to buy the Canadian energy and global agricultural unit of UBS AG, which is trying to slim down its unprofitable investment banking business.
Financial terms of the deal for UBS Commodities Canada Ltd. of Calgary, which is to close next quarter, were not disclosed. The Zurich company also said it is in talks with other parties to sell off other commodities lines.
JPMorgan Chase said buying the unit would allow the New York banking company "to immediately expand its presence in the Canadian natural gas, power and crude oil physical and financial markets, while further expanding the investment bank's overall Canadian client franchise."
The Canadian unit is to be run by Brian Cumming, a managing director formerly in JPMorgan Chase's London office.
JPMorgan Chase said its commodities business has grown through hiring and acquisitions in the past two years, with the addition of over 100 traders, salespeople, and other staff.
The agricultural operation includes a London trading and marketing team.
The deal is a further sign that JPMorgan Chase, which bought Bear Stearns when that firm's liquidity crisis nearly caused its collapse this year, is benefiting from its rivals' troubles.
UBS is all but exiting commodities trading. It entered the business much later than its Wall Street rivals, and the operation became mired in losses on illiquid securities last year.
The UBS investment banking business is to have just two components: precious metals and exchange-traded commodities.