Barclays Plc announced it will acquire financial services major Lehman Brothers' North American investment banking, capital markets operations and supporting infrastructure.
LONDON: UK banking giant Barclays Plc on Wednesday announced it will acquire financial services major Lehman Brothers' North American investment banking, capital markets operations and supporting infrastructure for USD 1.75 billion.
"Barclays will acquire trading assets with a current estimated value of 40 billion pound (USD 72 billion) and trading liabilities with a current estimated value of 38 billion (USD 68 billion) for a cash consideration of 0.14 billion pound (USD 250 million)," it said in a statement.
Barclays would also acquire the New York headquarters of Lehman Brothers and its two data centres for an estimated 0.8 billion pound (USD 1.5 billion), taking the combined consideration for the deal to one billion pound (USD 1.75 billion), it added.
"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," Barclays Group Chief Executive John Varley said.
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, Varley added.
The Board of Barclays announced that the bank had agreed for the acquisition subject to US Court and relevant regulatory approvals.
The transaction would create a premier integrated global bulge bracket investment banking company with a leading presence in all major markets and across all major lines of the business including: equity capital markets, debt capital markets, mergers and acquisitions, commodities trading and foreign exchange, the statement said.
In response to this opportunity, certain Barclays shareholders have expressed support for the transaction and interest in increasing their shareholdings in Barclays.
The Board of Barclays expects these discussions to lead to a subscription of at least 0.6 billion pound (USD one billion) of additional equity. The proposed transaction with Lehman Brothers and the additional equity would result in an enhancement of Barclays earnings and capital ratios, it added.
On the London Stock Exchange, Barclays Plc shares were trading up 9.82 per cent at 338.35 pence in the morning trade.
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