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Morgan Stanley to Sell Stake in TransMontaigne Partners

Stocks in this article: MS TLP

NEW YORK (TheStreet) -- Morgan Stanley (MS) said on Monday it has agreed to sell its ownership stake in TransMontaigne Partners  (TLP) to NGL Energy Partners for an undisclosed price, as the investment bank works to pare its exposure to commodities businesses amid new banking regulations.

>>Read More: Morgan Stanley Sells Piece of Commodities Business to Rosneft

The deal with NGL Energy includes Morgan Stanley's ownership interests in TransMontaigne, an oil storage, marketing and transportation company, in addition to physical inventory and other storage obligations that the bank had assumed.

Morgan Stanley said the sale won't materially impact its earnings, however, the bank does expect to gain from the transaction. The sale is expected by Morgan Stanley to close in the third quarter and is subject to U.S. regulatory review.

"Morgan Stanley's leading commodities division will be leaner, more client focused and better aligned with the rest of the firm's businesses," Colm Kelleher, head of Morgan Stanley's Institutional Securities division, said in a press release.

Monday's deal follows Morgan Stanley's announcement of a sale of its Global Oil Merchanting unit to the Russian oil and gas giant, Rosneft, late last year.

Morgan Stanley is not the only firm paring its exposure to the commodities business. JPMorgan (JPM) announced a sale of its physical commodities business to Mercuria Energy Group earlier in 2014. 

Deregulation gave banks exemptions that allowed for major investment in non-financial businesses such as the storage and transport of commodities in the energy and metals markets. However, in the wake of the financial crisis, banks have been selling off those investments to meet more stringent regulations on the scope of their businesses.

While Morgan Stanley and JPMorgan have announced large commodities-related sales in the past nine months, Goldman Sachs has not yet followed suit. Goldman Sachs has begun efforts to sell its metal warehousing business, but the nation's largest investment bank has given no indication it is looking to sell its J Aron commodities business.

Morgan Stanley shares were rising less than 1% in early Monday trading at $32.21. Year-to-date shares have gained over 2%.

>>Read More: There's No Justification for Crude Oil Prices in the Stratosphere

-- Written by Whalen MacHale in New York.

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