China's Fosun in talks to buy commodity broker Marex Spectron -sources
* Talks ongoing for several months, announcement seen this
* Marex's private equity owners keen to sell
* Fosun already has financial, commodity firms
By Eric Onstad and Pratima Desai
LONDON, Sept 12 (Reuters) - Chinese conglomerate Fosun
International Ltd is in discussions to buy
British-based commodities broker Marex Spectron, two industry
The deal to buy privately-owned Marex would expand the
portfolio of Fosun, one of China's most acquisitive overseas
dealmakers, in both financial services and commodities, of which
China is the world's largest consumer and producer.
Fosun already owns iron ore, steel and oil companies.
Fosun declined to comment.
A spokesman for Marex said: "Marex Spectron is a profitable
and successful business and such speculation isn't new. We don't
comment on such rumours."
The sources said discussions have been ongoing for several
months, with an announcement expected before the end of
September. The price was not immediately known.
Marex has been for sale for several years, sources said, as
its private equity owners sought an exit from their investment.
JRJ Group and its partners Trilantic Capital Partners and BXR
Group bought a majority stake in the broker in 2010.
Marex, one of the world's largest privately-owned brokers in
the commodities sector, was formed from the merger in 2011 of
metals dealer Marex Financial and energy broker Spectron Group.
Surging commodity volumes so far this year make this an good
time to sell, industry sources said.
Several brokers have benefited from the volatility in
industrial metals after U.S. sanctions were imposed on Russian
producer Rusal, with average profits rising about 30
percent, London Metal Exchange (LME) members told a Reuters poll
Marex is one of nine firms trading on the open outcry floor
of the LME, owned by Hong Kong Exchanges and Clearing Ltd
With two other LME ring-dealing firms owned by Chinese
parents - GF Financial Markets and CCBI Metdist - the deal would
mean that a third of the top-tier LME members are Chinese owned.
Marex Spectron posted pre-tax profit of $17.7 million last
year, up 30 percent from $13.6 million in 2016. Revenue rose 5
percent to $199.1 million.
In July, S&P assigned a BBB- long-term credit rating and a
"stable" outlook to the broker. In May, it increased its working
capital facility to $125 million from a consortium of banks.
Headquartered in London and also present in North America
and Asia, Marex Spectron's main brokerage businesses are
agricultural products, energy, base and precious metals.
Hong Kong-listed Fosun, co-founded by Chinese billionaire
Guo Guangchang, has a sprawling portfolio that includes health,
financial and leisure firms such as Club Med.
Its financial sector companies include Portugal's largest
insurance company Fidelidade, that country's biggest listed bank
Banco Comercial Português as well as German private
bank Hauck & Aufhäuser.
Fosun's portfolio also includes iron ore producer Haian
Mining, the parent of Nanjing Iron & Steel and
Australian upstream energy firm Roc Oil.
Last month, Fosun posted a 17 percent rise in first-half net
profit to 6.86 billion yuan. It has a market value of HK$112
(Additional reporting by Julie Zhu in Hong Kong; Editing by
Veronica Brown and David Evans)
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