Simpson Thacher & Bartlett and Cadwalader Wickersham & Taft are advising on the sale of JPMorgan's physical commodities business to Mercuria Energy Group for $3.5bn (£2.12bn).

The deal, announced by the bank yesterday, is an all cash transaction expected to close in the third quarter of 2014, subject to regulatory approvals.

JPMorgan's physical commodities arm is among the most dominant oil and metals desks on Wall Street. It is a major acquisition for Mercuria, giving it a stronger foothold in the energy and commodities markets. 

Simpson Thacher is acting for JPMorgan on the deal, with a New York based team leading. The firm is a longstanding advisor to the bank, and recently represented it in the wake of the Libor scandal.

Mercuria is being advised Cadwalader, with a team led by corporate partners Robert Stephens and Ira Schacter.

The group also turned to Cadwalader for regulatory, tax, commodities and antitrust counsel.

The teams featured Greg Lawrence, an energy and compliance specialist, corporate partner Richard Nugent, who focuses on the tax aspects of public and private M&A, antitrust and competition partner Jonathan Kanter, and commodities specialist Daryl Rice.

Mark Greenberg, Mercuria's most senior in house lawyer in North America, worked closely with the team.

The decision by JPMorgan to divest its commodities business follows similar moves by other banks in the wake of regulatory change. 

In December, Deutsche Bank ceased trading in energy, agriculture, base metals and dry bulk, the same month that Morgan Stanley sold most of its oil trading business to Russian petroleum giant Rosneft.

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