Morgan Stanley Sells Oil Merchanting Unit to Russia's Rosneft

NEW YORK (TheStreet) - Investment bank Morgan Stanley (MS) said on Friday it will sell its Global Oil Merchanting unit to Russian oil and gas giant Rosneft, exiting some of its investment in global storage, trading and transportation of oil and refined products.

About 100 Morgan Stanley executives, or one-third of the firm's total commodities front office, will move over to Rosneft, as part of the deal.

Morgan Stanley's merchanting business includes a network of oil terminal storage agreements, inventory, physical oil purchase, sale and supply agreements, equity investments and freight shipping contracts. Rosneft will also be buying Morgan Stanley's non-controlling 49% stake in Heidmar Holdings.

The deal won't include Morgan Stanley's oil trading business, its ownership stake in TransMontaigne, or any of its non-oil commodities businesses. Morgan Stanley said in a statement it is currently exploring strategic options for its stake in TransMontaigne.

The New York-based bank said the sale isn't expected to have a material impact on its financial results. Terms of the sale weren't disclosed. The transaction, which is subject to U.S. and E.U. approvals, is expected to close in the second half of 2014.

Morgan Stanley shares rose less than 1% in Friday trading to 430.96. Shares have gained over 60% year-to-date, more than doubling gains made by the broader S&P 500.

-- Written by Antoine Gara in New York

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