LEHMAN BROTHERS:BRITAIN'S THIRD-largest bank, Barclays, has conditionally agreed to buy most of Lehman Brothers' investment banking business in the US - two days after abandoning plans to acquire the entire Wall Street bank.
Barclays is likely to buy parts of Lehman at large discounts as the bank sells pieces of the business, including its brokerage and asset management units, following Lehman's decision to file the largest bankruptcy in US history.
Buying Lehman's core business would significantly boost Barclays' presence in the US and accelerate its strategic ambition to take market share from Wall Street banks. Barclays president Robert Diamond said last month he wants the bank to challenge Wall Street banks weakened by the credit crunch and break into the "top tier" of US securities firms.
The bank could also gain a prominent property at the top of Times Square if it agrees to buy the Lehman building in New York.
For Lehman, the deal provides the prospect of securing jobs for some of its staff and may improve rates of recovery for its creditors.
It remains unclear whether Barclays will seek to buy Lehman's investment banking operations in Europe and Asia, although Barclays must buy the US business first before considering a bid for more parts of the bankrupt bank. (Additional reporting: Bloomberg, Financial Times)
