Tokyo: Nomura Holdings Inc, Japan’s largest brokerage, said it plans to buy the European natural gas and power trading businesses of Canadian company Nexen Inc, in a deal reportedly worth about $55 million.
The move comes as several other banks have expanded their commodity trading desks to replace revenues from more traditional areas of investment banking such as equity underwriting and advising on mergers and acquisitions.
Nomura, which is looking to expand globally using operations bought from the bankrupt Lehman Brothers, hopes the acquisition of Nexen Energy Marketing London will bolster its existing commodities operations in Europe and Asia, expanding its presence in the fast-growing commodities sector.
NEML has trading activities in Belgium, Britain, Germany and the Netherlands, and would offer Nomura access to a physical commodities trading platform, not just futures or derivatives.
Nomura officials declined to provide details of the acquisition but the Financial Times reported earlier on Monday that the deal would likely to cost Nomura some $55 million.
Nomura’s shares lost 1.4% to close at ¥632, while the benchmark Nikkei average fell 0.8%.
Banks and investment funds have been looking to expand their commodity and energy businesses in recent years partly to capitalise on growing demand for hedges against volatile prices.
JP Morgan Chase is in exclusive talks to buy the RBS Sempra commodities joint venture in a deal worth about $4 billion.
Credit Agricole Corporate and Investment Bank also told Reuters this month that it plans to expand its commodity trading operations and enter the European physical gas and power markets by the end of March.