Barclays announces agreement to partly acquire Lehman Brothers
2. Transaction Benefits
The Acquisition will combine two strong client franchises and product offerings, with the potential to create significant value for Barclays shareholders. The Lehman Brothers businesses are a highly complementary fit for Barclays investment banking business, Barclays Capital. The combined business will be a premier global investment bank with an increased presence in the US and an enhanced product offering. Among other benefits, the combination of the two businesses will:
* confirm Barclays Capital as a leading debt capital markets house globally;
* have a top 3 position in the US capital markets, the largest in the world;
* extend Barclays Capital's range of investment banking products, with the addition of Lehman Brothers strong US M&A and equity capital markets franchises; and
* strengthen Barclays Capital's hedge fund franchise through the addition of prime brokerage and cash equity capabilities.
The Acquisition will result in the proportion of Barclays revenues derived from the US rising significantly. Given the strong cultural fit, Barclays intends to achieve a rapid integration so as to minimise disruption to employees, clients and counterparties.
3. Barclays Current Trading
Barclays has traded satisfactorily in July and August. The monthly run rate for the Group's profit before tax in these months was slightly lower than the average for the first half of the year, reflecting usual seasonality. All businesses were profitable.
4. Employees and Management
Barclays believes the Lehman Brothers businesses have an excellent team of people whose skills, capabilities and culture provide a good fit with Barclays and its clients. Barclays looks forward to welcoming them to our team and working together to deliver the combination's full potential.
The acquired businesses will be merged into Barclays Capital, which forms part of Barclays Investment Banking and Investment Management of which Robert E Diamond Jr, is Chief Executive.
5. Share Issue
Further details of the expected issue of new shares in connection with the Acquisition will be published in due course.
Barclays Capital, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch and JPMorgan Cazenove Limited are acting as financial advisers to Barclays. Credit Suisse Securities (Europe) Limited and JPMorgan Cazenove Limited are joint corporate brokers to Barclays. Clifford Chance LLP and Cleary Gottlieb Steen & Hamilton LLP are acting as legal advisers to Barclays.
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(This is a release from Barclays)
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