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Barclays to buy part of Lehman

September 17, 2008|From Bloomberg News

Barclays, Britain's third-biggest bank, will acquire the North American investment-banking business of bankrupt Lehman Bros. Holdings Inc. for $1.75 billion, two days after abandoning plans to buy the entire firm.

Barclays is paying $250 million in cash for the Lehman business and $1.5 billion for the securities firm's New York headquarters and two data centers, the London bank said Tuesday. The operations employ about 10,000 people.

Lehman is selling pieces of itself that weren't included in Monday's bankruptcy filing, the largest-ever Chapter 11 reorganization.

Barclays President Robert Diamond said last month that he wanted the bank to take market share from Wall Street firms weakened by the credit crunch and break into the "top tier" of U.S. securities firms.

"While this could be a positive development for the long run, given the current market conditions, we are skeptical that the market is going to reward any deal," said Derek Chambers, a London analyst at Standard & Poor's Equity Research.

Lehman is in talks to sell its investment-management unit to private equity bidders.

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