Marubeni Corp., a Japanese trading house, is advancing discussion to cut Gavilon's energy arm. This was out of its takeover of the US commodity merchant according to sources who have direct knowledge of the offer said on Friday.

The acquisition was valued roughly US$5.6 billion including the debt of Gavilon's agriculture division, the core business arm of the firm. Once the deal is finalized, Gavilon is said to propel its way on top of worldwide grain traders. This will also allow it to tap the rising demand of Chinese consumers.

Sources pointed out that the Japanese company has less interest in taking over Gavilon's mid-sized energy operation focusing on gas, renewable fuels and oil.

Speaking on condition of anonymity, a source said that the deal between the two companies was directed towards the grains and not the oil. The source added that the discussion will be concluded by early next week.

Gavilon's energy arm can now join other mid-sized energy traders that are for sale. This includes company like HETCO, Hess Corp.'s trading arm of oil firm and Morgan Stanley that were set to sale part or all of its energy focused division since last year.

Spokesperson for Marubeni and Gavilon declined to give comments regarding said deal.