The UK's third largest banking entity, Barclays plc, has confirmed that it has agreed to acquire assets of Lehman Brothers Holdings, mainly the North American investment banking and capital market operations of the bankrupt investment bank. Barclays will pay cash of around $250 million for this part of the acquisition. (See: Barclays in talks to acquire Lehman's securities business)
Barclays will also acquire Lehman's New York headquarters, along with two data centres that have been not discounted as much, and are closer to their market value of about $1.5 billion.
All together, Barclays would pay around $1.75 billion.
After having walked away from buying out of the entire Lehman Brothers over the weekend, the UK's third largest bank, Barclays Plc, yesterday said it was in negotiations to acquire "certain assets" of the US firm.
Lehman had said that it was looking to sell its broker-dealer operations, and had potential purchasers for its investment management division.
Barclays will now own Lehman's large-fixed income trading operations. It would also have avoided acquiring Lehman's substantial portfolio of toxic real estate assets that forced the investment banking firm into bankruptcy in the first place.
Private equity players are reported to have placed bids for Lehman's investment management division, including the prized Neuberger Berman unit.
For Barclays, the acquisition means a better toe hold for its US operations, which it has been trying to expand for some time. It also creates a premier integrated global investment banking company, present in all major markets, across all major lines of business, including markets, debt markets, mergers and acquisitions, commodities and foreign exchange.
Parts of Lehman that would be acquired by Barclays are said to employ around 10,000 people, and would be merged with Barclays Capital, part of the bank's investment banking and management unit.
Commenting on the proposed acquisition, Barclays Group Chief Executive John Varley said, "The proposed acquisition of Lehman Brothers North American investment banking and capital market operations accelerates the execution of our strategy of diversification by geography and business in pursuit of profitable growth on behalf of our shareholders, in particular increasing the percentage of Barclays earnings sourced in North America."
He said that the transaction delivers the strategic benefits of a combination with Lehman Brothers core franchise, whilst meeting Barclays strict financial criteria, and ''strengthening our capital ratios."
The acquisition is subject to several conditions and regulatory approvals, and Barclays has said that the agreement for the acquisition may be terminated if not completed by 24 September, this year.
|Lehman Brothers' 30 largest unsecured claims (excluding insiders) |
|Pursuant to Local Bankruptcy Rule 1007-2(a)(4), the following lists Lehman Brothers' thirty largest unsecured claims, on a consolidated basis, excluding claims of insiders as defined in 11 U.S.C. § 101. The list, as filed before the United States Bankruptcy Court, Southern District of New York.|
|Name of creditor and complete mailing address, including zip code ||Nature of claim ||Estimated amount of claim as of 2 July 2008|
|Citibank, N.A., as indenture trustee, and The Bank of New York Mellon Corporation (with respect to the Euro Medium Term Notes only), as indenture trustee, under the Lehman Brothers Holdings Inc. Senior Notes ||Bond debt ||Approximately $138 billion|
|The Bank of New York Mellon Corporation, as indenture trustee under the Lehman Brothers Holdings Inc. Subordinated Debt ||Bond debt ||Approximately $12 billion|
|The Bank of New York Mellon Corporation, as indenture trustee under the Lehman Brothers Holdings Inc. Junior Subordinated Debt ||Bond debt ||Approximately $5 billion|
|AOZORA, Tokyo, Japan ||Bank loan ||$463,000,000|
|Mizuho Corporate Bank, Ltd. Global Syndicated Finance Division Tokyo, Japan ||Bank loan ||$289,000,000|
|Citibank N.A. Hong Kong Branch, Financial Institutions Group Asia Pacific, Hong Kong ||Bank loan ||$275,000,000|
|BNP Paribas, New York, New York, USA ||Bank loan ||$250,000,000|
|Shinsei Bank Ltd., Tokyo, Japan ||Bank loan ||$231,000,000|
|UFJ Bank Limited, Tokyo, Japan ||Bank loan ||$185,000,000|
|Sumitomo Mitsubishi Banking Corp, Tokyo, Japan ||Bank loan ||$177,000,000|
|Svenska Handelsbanken, New York, New York, USA ||Letter of credit ||$140,610,543|
|KBC Bank, New York, New York, USA ||Letter of credit ||$100,000,000|
|Mizuho Corporate Bank Ltd., Tokyo, Japan ||Bank loan ||$93,000,000|
|Shinkin Central Bank, Tokyo, Japan ||Bank loan ||$93,000,000|
|The Bank of Nova Scotia Singapore Branch, Singapore ||Bank loan ||$93,000,000|
|Chuo Mitsui Trust & Banking, Tokyo, Japan ||Bank loan ||$93,000,000|
|Lloyds Bank, 1251 Avenue of the Americas, 39th Fl., P.O., Box 4873, New York, NY 10163 ||Letter of credit ||$75,381,654|
|Hua Nan Commercial Bank, Ltd, Taipei, Taiwan ||Bank loan ||$59,000,000|
|Bank of China, New York Branch, New York, New York, USA ||Bank loan ||$50,000,000|
|Nippon Life Insurance Co., Tokyo, Japan ||Bank loan ||$46,000,000|
|ANZ Banking Group Limited, Seoul, Korea ||Bank loan ||$44,000,000|
|Standard Chartered Bank, New York, New York, USA ||Bank loan ||$41,000,000|
|Standard Chartered Bank, New York, New York, USA ||Letter of credit ||$36,114,000|
|First Commercial Bank Co., Ltd, New York Agency, New York, New York, USA ||Bank loan ||$25,000,000|
|Bank of Taiwan, New York Agency, New York, New York, USA ||Bank loan ||$25,000,000|
|DnB NOR Bank ASA, Oslo, Norway ||Bank loan ||$25,000,000|
|Australia and New Zealand Banking Group Limited, Melbourne, Australia ||Bank loan ||$25,000,000|
|Australia National Bank, New York, New York, USA ||Letter of credit ||$12,588,235|
|National Australia Bank, New York, New York, USA ||Letter of credit ||$10,294,163|
|Taipei Fubon Bank, New York Agency, New York, New York, USA ||Bank loan ||$10,000,000|