Japan's Nomura Broadens Horizons With Purchase of Bankrupt Lehman Assets

By Jennifer Yousfi
Managing Editor

Nomura Holdings Inc. (ADR: NMR) yesterday (Monday) snapped up bankrupt Lehman Brothers Holdings Inc.'s (OTC: LEHMQ) Asia assets, and is close to inking a deal for its European units as well.

Tokyo-based Nomura will pay $225 million for Lehman's Asia-Pacific operations. As part of deal, Nomura will take on 3,000 former Lehman employees in the region.

"The businesses we are acquiring are hugely successful with excellent management and staff. This is a once-in-a-generation opportunity," said Nomura Chief Executive Kenichi Watanabe of the deal, MarketWatch reported.

"Our ability to capitalize on this opportunity in spite of such volatile markets reflects our financial strength and demonstrates how well we have managed the credit crisis. This deal is validation for our strategy," Watanabe said.

PricewaterhouseCoopers LLP is leading the search for buyers of Lehman's European assets. Unnamed sources close to the deal named Nomura as the final suitor for the European units. Barclays PLC (ADR: BCS), which earlier acquired Lehman's North American operations for the bargain basement price of $1.75 million, had only been interested in the equities division.

"We are now focusing on one party as they are interested in acquiring a wider team, which should result in a better deal for staff and creditors," PwC partner Dan Schwarzmann said, but declined to identify the sole bidder by name. "Given the complexity of Lehman Brothers, these negotiations are difficult, but I'm hoping to give certainty to all involved in the short term."

Many felt the purchase of Lehman's Asia and European units was a good fit for the expansion-hungry Nomura.

"Nomura's global hub for this business is London, rather than New York, so bidding for Lehman's European operation makes sense," Wataru Kasatani, senior financial analyst at Meiji Dresdner Asset Management, told Reuters. "Lehman's Asia operation will also add value to what Nomura has been doing in Asia."

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