UPDATE 2-Warehousing firm C. Steinweg plans to stay independent

Mon Mar 7, 2011 8:07am EST

* Steinweg not talking to Glencore

* Glencore looking to boost warehousing unit

(Adds comment, paragraphs 4, 10-12)

By Pratima Desai

LONDON, March 7 (Reuters) - Rotterdam-based warehousing firm C. Steinweg is planning to stay independent and is not negotiating to sell itself or parts of its business, a source at the company said on Monday.

News that Glencore, the world's largest commodity trader, wants to boost its presence in warehousing by combining its recently acquired Pacorini unit with an outside partner has increased speculation that the target would be Steinweg. [ID:nLDE7222DG]

"We like to stay independent; that is where we have been for 164 years," the source said, adding the firm was not talking to Glencore about a merger or sale.

Glencore declined to comment.

The plans by Glencore were detailed in its full annual report distributed to its bondholders and also obtained by Reuters last week.

The company reported a 40 percent jump in 2010 profit and promised a robust 2011, strengthening its hand for a possible stock market listing that could value it at about $60 billion. [ID:nLDE7220A5]

Glencore completed its purchase of the metals warehousing division of Pacorini, the Italian family-owned company, last September. The Swiss-based group said it had paid $209 million in cash for the business. [ID:nLDE68D0RR]

Glencore said it had begun "a review of the strategic alternatives to strengthen Glencore's participation in the metals warehousing business, which is expected to result in a merger involving the acquired business and a third party".

It gave no further details of the merger plans.

A warehousing source said Glencore may not be looking to acquire another warehousing company. [ID:nLDE71118E]

"I think that's highly unlikely," he said. "They are building additional warehousing space, I believe in Vlissingen. That's quite a large project to my understanding."

Glencore also declined to comment on whether it was building additional warehousing space.

Steinweg was founded in 1847 as a forwarding agent. It stores metals, chemicals, plastics and soft commodities. (Editing by James Jukwey and Jane Baird)