UPDATE 1-Louis Dreyfus sells energy trading ops
* Deal highlights upheaval in middle ranks of commodity traders
* Size of transaction not disclosed
Oct 4 (Reuters) - Louis Dreyfus Group and a unit of JPMorgan Chase & Co have agreed to sell their jointly owned energy trading business to two investor groups, the companies said on Thursday.
The deal underlines intensifying upheaval among the middle ranks of the world's commodity traders, coming just a day after private equity giant Carlyle Group LP shook up the sector with the purchase of a leading hedge fund.
Separately, Morgan Stanley's commodity trading division appears to be closing in on a deal to spin itself out from the bank, which is facing tough new regulations that threaten to curtail bonuses and limit physical trade. It may now sell a majority stake in the unit to the Qatar Investment Authority, more than the minority stake earlier discussed, the Financial Times reported.
While industry giants like Glencore and Vitol
have maintained their status quo, the ranks of a dozen or so mid-tier firms have been jolted by a series of acquisitions, start-ups and ownership changes that are dramatically altering the competitive landscape.
It began last year with the rebirth of Sempra's merchant shop in the form of Freepoint Commodities, backed by private equity. It carried on this year with Marubeni's deal to buy U.S. grains trader Gavilon.
Louis Dreyfus Highbridge Energy, or LDH Energy, will be sold for an undisclosed amount to a private investment vehicle owned by Glenn Dubin, and an independent investor group, the companies said.
Dubin is the chairman and co-founder of Highbridge Capital Management, the JPMorgan unit that co-owns LDH Energy.
The announcement confirmed a report earlier in the Financial Times.
"As we focus our efforts on our core business as a global leader across major commodities, we look forward to maintaining our relationship with LDH Energy as a minority investor," Serge Schoen, chief executive of the Louis Dreyfus Commodities Group said in the statement.
Upon completion of the transaction, LDH Energy will be rebranded Castleton Commodities International.
(Reporting by Manolo Serapio Jr. in SINGAPORE and Jonathan Leff in NEW YORK; Editing by Joseph Radford)
Keywords: DREYFUS LDHENERGY/SALE