Barclays has struck a £1bn deal for Lehman Brothers’ North American investment banking and capital markets business and office space. Lehman’s trading assets are valued at £40bn while trading liabilities are estimated to value £38bn.
Still subject to US Court approval, the deal breaks down into a £140m payment for the operations, to inlcude around 10,000 employees. A further £800m payment will be made for Lehman’s North American office space property. This comprises of New York headquarters and two data centres in New Jersey.
John Varley, Barclays Group chief executive, 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. This transaction delivers the strategic benefits of a combination with Lehman Brothers core franchise, whilst meeting Barclays strict financial criteria, and strengthening our capital ratios.’
Herbert H McDade III, Lehman Brothers chief operating officer, said: ‘Lehman Brothers strength has always been our client franchise. With this transaction, we have the opportunity to continue the growth and development of our US investment banking and capital market franchises with one of the leading financial institutions in the world.’
Tags: Barclays, Lehman Brothers