Morgan Stanley and Rosneft said Monday that they were terminating the agreed sale of a large portion of Morgan Stanley’s oil trading business to the state-controlled Russian oil company.
The sale was announced a year ago but regulators declined to clear the arrangement, creating “an objective impossibility to complete the deal,” Rosneft said in a statement on Monday. Morgan Stanley had said that the agreement would expire if necessary approvals were not received by Saturday.
The collapse of the sale of the trading unit is the latest energy-related deal to encounter difficulties after tensions arose between the West and Russia over Ukraine. President Vladimir V. Putin of Russian said this month that he was calling off a long-planned giant pipeline called South Stream that was to bring Russian gas under the Black Sea to Europe.
BASF, the German chemical giant, said on Thursday that it was cancelling a planned asset swap with Gazprom, the Russian gas export monopoly, that would have seen BASF’s oil and gas subsidiary, Wintershall, gain stakes in two west Siberian gas fields in exchange for Gazprom taking full control of the of two companies’ gas trading and storage joint venture in Germany.
“Due to the currently difficult political environment, BASF and Gazprom have decided not to complete the asset swap planned for the end of the year,” BASF said in a statement.
In the Morgan Stanley deal, the bank had agreed to sell a sizable oil trading and storage business to Rosneft. The sale was seen as part of the effort to address regulators’ concerns about the risks of financial institutions engaging in commodities trading. The bank said a year ago that about 100 executives in the United States, Britain and Singapore, or about one-third of its total “front office” commodities personnel, would move to Rosneft as part of the transaction.
Morgan Stanley said it would now consider “a variety of options for the unit.”