UBS made an expected statement on Friday that they are selling some of their commodities businesses, something the have mentioned as a goal in the past.
Barclays Capital is acquiring the power and gas businesses in the U.S., oil, and their base metals divisions. All together approximately 100 people are employed in the combined companies or units. Details of the terms of the deal weren't disclosed.
With losses in the billions, UBS is looking for alternative ways to raise capital in these difficult circumstances. They've already written down about $49 billion and received intervention from the government.
Other deals they've made are the sales of the stake they had in the Bank of China, and separately their global agriculture business and Canadian energy operations to J.P. Morgan Chase.
Last year they also got out of some of the power and gas markets they served in Europe, while keeping those in North America, northwest Europe and Britain.
The company is keeping its exchange-traded commodities, precious metals and index commodities, as well as continuing to trade in refined oil products and crude oil.
Assuming specific conditions of the deal are met, it should close sometime at the end of the second quarter.
The move is understandable, but when commodities begin to return in the future, they'll be sorry at the extraordinary profits they forfeited.
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