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Glencore International and Credit Suisse have agreed to terminate their strategic alliance and replace it with a licensing and consultancy deal, Glencore told MB.
“Credit Suisse and Glencore can confirm they have agreed to replace their existing alliance with a new, multi-year licensing and consulting agreement with regard to Credit Suisse’s commodities business,” a spokesman for the Swiss trading house said.
“Both parties look forward to working with each other in the future.”
The companies formed the alliance in August 2006, creating a derivatives and structured products trading business for both base and precious metals based at Glencore’s offices in Baar and Credit Suisse’s offices in Zurich.
The joint venture enabled Credit Suisse to rapidly accelerate its commodities division while allowing Glencore access to Credit Suisse’s structured products and derivatives business.
In January 2007, Credit Suisse hired Adam Knight, then head of metals trading at Goldman Sachs, to head the invigorated commodities business.
But, with the termination of the alliance, Knight has now left the bank. While some market sources are linking Knight’s departure with the lukewarm reception for recently launched, commodities-backed exchange traded funds (ETFs) – Credit Suisse has been planning its own aluminium ETF – others put it down to the bank’s relationship with Glencore.
“The relationship was not great there at the end,” one trader in London said.