NEW YORK (Reuters) - Goldman Sachs has begun a formal process to sell the metals warehousing business it purchased four years ago, a spokesman said on Tuesday, disclosing the first definitive effort to shed the operation amid regulatory and political pressure.
The Wall Street firm, one of the few major global banks that has not pulled back from commodity markets in recent months, decided to explore a sale after receiving interest from potential buyers, the spokesman said in an email to Reuters.
The bank contacted possible bidders about buying Detroit-based Metro International Trade Services on Monday, a source familiar with the matter told Reuters on Tuesday.
A second source said the bank had approached his company informally about a potential sale.
The discussions suggest Goldman is making a clear effort to move forward after a year of on-and-off talks over the fate of Metro, a cash cow for the bank amid soaring global metal inventories but a business that has more recently become the focus of lawsuits, regulatory scrutiny and public outrage.
The identity and number of possible bidders contacted by Goldman is not known, but one of the sources said they included other banks, merchants and warehousing companies inside and outside of the United States. Goldman purchased Metro for some $550 million four years ago.
"They've got people they're approaching. They've never gone out and approached anyone before," said the person, adding that the approaches were made on Monday.
The news comes as tightening regulation and intense political scrutiny transform the U.S. physical commodities landscape, forcing some Wall Street banks to retreat from the lucrative business of dealing in oil, copper to grains.
JPMorgan Chase & Co and Morgan Stanley are divesting all or part of their physical commodities businesses.
Goldman executives have repeatedly said the bank is committed to its decades-old commodities trading business, deeming it too important to clients to exit.
Reporting by Josephine Mason; Editing by Jonathan Leff and Peter Henderson