JPMorgan Chase and Sempra Energy may carve up commodities venture RBS Sempra, people familiar with the matter said, as pressure on U.S. banks to limit proprietary trading forces JPMorgan to rethink its plans.
JPMorgan is still in talks to buy RBS Sempra's global oil business and all assets outside North America, while Sempra Energy is in talks to buy out all of the North American power and gas business, the sources said on Monday.
Sempra owns 49 percent of RBS Sempra, with Royal Bank of Scotland owning the rest.
JPMorgan has been in exclusive talks to buy all of RBS Sempra for about $4 billion, but the United States' plans to stop proprietary trading by banks have prompted it to rethink its plans, sources said.
North American power and gas is also the area of commodities where JPMorgan is strongest and would have most overlap with RBS Sempra. That stems from its acquisition of Bear Stearns in March 2008, when it bulked up with Bear Energy, which included the Williams Power Co and traded power, natural gas and other commodities and owned physical assets like power plants and gas pipelines.
PROP TRADING BAN
JPMorgan is keen to expand its commodities arm and has been growing aggressively in recent years under Blythe Masters, who has said she wants her part of the bank to become a top-tier franchise globally.
The bank is keen to take on the top three commodities firms -- Goldman Sachs , Morgan Stanley and Barclays -- and a purchase of all of RBS Sempra would have achieved that goal.
But banks are coming under increasing pressure to limit speculative activity and RBS Sempra does conduct proprietary trading with its own money rather trading than for a client.
Plans by U.S. President Barack Obama to ban banks from proprietary trading should not derail JPMorgan's deal to buy RBS Sempra's oil operations and all businesses outside North America, several sources have said.
The European Union is forcing RBS to sell its 51 percent stake in RBS Sempra. Sempra Energy had been in talks to sell its 49 percent as part of the deal, but may now take full control of the U.S. power and gas assets.
RBS Sempra Chief Executive Kaushik Amin resigned on Friday and was replaced by co-chief executives Mike Beck and Michael Goldstein, people familiar with the matter said.
The interim CEOs had updated senior management on the progress of talks over the weekend, but gave no reason why Amin had left, one of the sources said.
An RBS spokesman said constructive discussions regarding the sale of RBS Sempra were still under way.
JPMorgan declined to comment.
JPMorgan started exclusive talks with RBS and Sempra on about January 20, after seeing off rival suitor Deutsche Bank , which is not expected to have re-entered any talks.
(Additional reporting by Emma Farge in London and Edward Taylor in Frankfurt; Editing by Hans Peters and David Holmes)