Barclays buys Lehman’s broker-dealer unit

I had indicated that Barclays is in talks with Lehman to buy its broker-dealer business. The deal has been executed and press release from Lehman tells about the deal. The features are:

  • Barclays Agrees to Acquire Lehman Brothers’ North American Investment Banking, and Fixed Income and Equities Sales, Trading and Research Operations, Including Approximately 10,000 Employees
  • Discussions to Acquire Lehman Brothers’ Select Operations Outside of North America
  • Barclays Agrees to Purchase Lehman Brothers’ Headquarters Office Building and  Two Other Facilities
  • Barclays Enters into Support Agreement with Lehman Brothers to provide;
    – $500 Million DIP-Financing to Lehman Brothers Holdings Inc.
    – A Substantial Interim Credit Facility to Lehman Brothers Inc.

So, both capital markets division and i-banking division have been bought. Basically, Barclays capital, the i-banking arm has brought the lehman assets.  

 The total amount of deal has not been disclosed. So, Lehman Holding company has three remaining businesses:

  • I-managment division (worldwide)
  • Capital markets (worldwide minus North America)
  • i-banking operations (worldwide minus North America)

I loved the statements from the officials of both Barclays and Lehman:

Robert E. Diamond, Jr., Barclays President, said, “This is a once in a lifetime opportunity for Barclays. We will now have the best team and most productive culture across the world’s major financial markets, backed by the resources of an integrated universal bank. We welcome the opportunity to add Lehman’s people and capabilities to the Barclays team.”

“This is a wonderful outcome for a great number of our employees that will preserve and strengthen our terrific franchise,” said Richard S. Fuld, Jr., Chairman and Chief Executive Officer of Lehman Brothers.

I am sure Barclays must have got it a fraction of a price but it is too early celebrate. It will still have to assume Lehman’s division losses and financial markets are still extremely panicky.  About Fuld, less said the better.

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2 Responses to “Barclays buys Lehman’s broker-dealer unit”

  1. RBI measures post Lehman bankruptcy « Mostly Economics Says:

    […] Mostly Economics Mostly on research work in Economics and Financial System with focus on India « Barclays buys Lehman’s broker-dealer unit […]

  2. Barclays buys Lehman’s broker-dealer unit Says:

    […] post by Amol Agrawal Barclays buys Lehman’s broker-dealer […]

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