J.P. Morgan will acquire UBS Commodities Canada Ltd., the Canadian energy operations of UBS AG, as well as the global agricultural business of UBS, J.P. Morgan announced Monday.

Terms of the acquisitions, which are expected to close during the first quarter of 2009, were not disclosed.

Calgary-based UBS Commodities Canada Ltd. will become an indirect wholly owned subsidiary of J.P. Morgan. The acquisition will allow J.P. Morgan to immediately expand its presence in the Canadian natural gas, power and crude oil physical and financial markets, while further expanding the investment bank’s overall Canadian client franchise. J.P. Morgan’s Calgary office will be run by Brian Cumming, a managing director with extensive experience in the commodity markets who had been based in London, UK.

J.P. Morgan will also acquire UBS’ global agricultural business, which includes a London-based trading and marketing team. The addition of UBS’ business will expand J.P. Morgan’s client franchise and risk management capabilities across agricultural products.

“We continue to take advantage of opportunities that will further enhance and diversify our global commodities business,” said Blythe Masters, head of Global Commodities at J.P. Morgan. “The addition of these businesses and talented teams further expands our North American energy franchise and provides further depth to our growing agricultural and soft commodities platform.”

UBS said that the businesses it’s selling are considered “non-strategic”, and these sales follow its plan to reprioritize its business portfolio to focus on its core strengths and client franchises in the securities and advisory businesses, while downsizing or exiting certain business activities. As part of this, the firm’s investment bank is exiting all of its commodities businesses, with the exception of precious metals and the index and exchange-traded commodities activities. UBS said it is also in discussions with other third-parties with regards to the potential sale of other parts of its non-strategic commodities businesses.

In Canada, UBS continues to operate a wealth management, global asset management, and investment banking business, notes Toronto-based spokesman Graeme Harris.

IE