Goldman Sachs sells Metro to Reuben Brothers

Goldman Sachs has completed the sale of its London Metal Exchange warehouse unit Metro International Trade Services to a subsidiary of the Reuben Brothers, formerly one of the world’s largest aluminium producers through Trans-World Metals.

The terms of the transaction were not disclosed, but the Reuben Brothers beat off expressions of interest from Chinese and Russian firms to be selected.
The bank has always said that Metro, which it acquired in 2010 and has been formally for sale since May, was never strategic to it.
Goldman Sachs did not integrate Metro into its commodities market-making activities as a result.
The new owner of Metro is run by two brothers, David and Simon, who dominated the aluminium market through their interests in Russia in the 1980s and 1990s.
They exited the aluminium industry sector, but returned more formally to natural resources when they formed steel trading and steelmaking raw materials company Metalloyd in 2001.
Metalloyd, which became known as RBRG (UK) Trading Ltd, became part of the Gerald Group in April.
At the time of the Metalloyd deal with Gerald, the Reuben Brothers said they planned to focus on growing their investment business across the natural resources and logistics sectors.
They already invest in mining projects in Morocco and Indonesia.
Gerald also acquired a stake in LME-approved warehousing business Erus Metals Ltd from RBRG Trading, formally Metalloyd, in May.
They are also leading players in private equity, real estate and venture capital.
For its part, Goldman Sachs recently reiterated its commitment to physical commodities trading but said it has no current plans to acquire additional physical assets.
The sale follows a tough year for the broader US banking community with regards their activities in physical commodities.
US Senator Carl Levin grilled executives at Metro and Goldman Sachs in a hearing last month, citing the bank’s ownership of the warehouse unit as an example of how it artificially created warehouse queues and inflated premiums for physical delivery – allegations it has always contested.

Andrea Hotter


Andrea Hotter

December 22, 2014

23:15 GMT

New York