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September 17, 2008    

Barclays buys core Lehman assets for £1bn

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by Kay Murchie

British bank Barclays has paid $1.7 billion (£952 million) for Lehman Brothers’ US investment banking and capital markets businesses.

On Monday, Wall Street giant, Lehman Brothers was forced to file for bankruptcy after announcing it had failed to find a solution to its problems after a weekend of rescue talks with Barclays and Bank of America.

It has been confirmed that Barclays has purchased Lehman’s North American investment banking and trading unit for $250 million while a further $1.5 billion was paid for its headquarters in New York and two data centres.

However, the deal is subject to regulatory approval.

A BBC report yesterday said that Barclays would not be interest in Lehman’s ‘toxic investments in the residential and commercial property markets’. Barclays, which is Britain’s third largest bank, is acquiring Lehman’s fixed income, equities sales and research departments in North America.

Thousands of staff lost their job as a result of Lehman’s collapse but Barclays has also confirmed that it is considering employing some of Lehman’s UK staff.

Barclays president, Bob Diamond, said it will look for talented staff from the UK and Europe and that it is acting on the opportunities available to them.

Administrators for Lehman in the UK, PricewaterhouseCoopers, said there is interest in LBAM (Europe) and Lehman Brothers Europe, of which both businesses are solvent and trading.

Commenting on the proposed deal, Barclays’ chief, John Varley, said the acquisition is part of a policy which will provide significant value to its shareholders, as well as increasing its presence in the US.

Following the news, shares in Barclays rose 7.2% to 330.50p.

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Tags: , £1bn, , buy, Lehman