Bear Stearns works to become Street's largest trader of energy
Bear Stearns works to become Street's largest trader of energyBear Stearns energy unit cuts biggest dealBear Stearns has made its largest acquisition to date from its Bear Energy unit with the purchase of another energy trading company, as it pushes to become the Wall Street's largest physical trader of energy.
The investment bank has agreed to buy Houston-based energy trader Williams Power from its parent natural gas company, The Williams Companies, for $512m (€381m). It is the largest amount invested by Bear Energy in a power company to date, a spokeswoman said.
The bank set up Bear Energy last year after a proposed joint venture with Calpine Energy Services fell apart when the California power company went bankrupt.
Paul Posoli, Bear Energy’s president, said at Bear Stearn's annual meeting this year he plans to make it the largest physical trader of energy on Wall Street with revenues exceeding $100m.
The acquisition is a significant step forward toward realizing Bear Energy’s goals, since it is the first time that the bank will serve as a principal for energy inflow and outflow to plants around the country, according to the spokeswoman.
As the energy sector recovered from the Enron debacle, a number of banks have moved aggressively into investing in energy infrastructure and trading. Besides Bear Stearns, Goldman Sachs, Merrill Lynch and Lehman Brothers have all bought energy assets in recent months.
Last week, Goldman Sachs sold 14 of its 18 power plants owned by Goldman subsidiary Congentrix Energy.
Moody's Investors Service and Standard & Poor's both said they would consider raising The Williams Companies ratings based on its deal to sell its subsidiary to Bear Stearns.
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energy markets, energy derivatives, power trading, utilities
Labels: energy derivatives, energy markets, power trading, utilities
posted by Victor Lloyd Smith @ 10:24 AM
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