- credit crisis - Federal Reserve - financial crisis - Hong Kong - Japan - USA
Japan's Nomura Holdings said Tuesday it will buy Lehman Brothers' operations in Europe and the Middle East, sharply raising its global presence after acquiring the fallen Wall Street titan's Asian side.
The two deals, reached a day apart, mark a strong expansion drive by the brokerage, which like other Japanese financial institutions has been relatively unscathed by the subprime crisis pounding the markets.
Nomura said it would offer employment to all 3,000 Lehman Brothers' workers in Asia while retaining "a significant proportion" of its 2,500 staff in the European and Middle Eastern regions.
Financial terms for the two deals were not disclosed.
"In the past 24 hours Nomura has executed two transformational deals," said Nomura's CEO Kenichi Watanabe in a statement.
"This transaction will significantly extend our European footprint and international reach, enabling us to realise our strategy of delivering Asia to the world."
"Our immediate priority is to get the equity and investment banking divisions back in business operating under the Nomura name," he said.
British bank Barclays was also said to be in the race for the European arm of Lehman, which went bust a week ago in the highest profile casualty of the global credit crisis.
Barclays, however, sealed a 1.75-billion-dollar deal to acquire Lehman's investment banking and trading units, which employ about 9,000 people in the United States, and a skyscraper that the bankrupt US firm occupied in Manhattan.
Japanese financial institutions have seized the opportunity of the subprime crisis to expand after getting over their own crisis of bad loans lingering from Japan's long recession in the 1990s.
Mitsubishi UFJ Financial Group Inc. (MUFG) said Monday it will invest between 400 and 900 billion yen (3.75 billion to 8.5 billion dollars) in Morgan Stanley, eventually buying up to 20 percent of the ailing financial giant.
The deal came after Morgan Stanley and Goldman Sachs both agreeed to become holding companies, submitting themselves to more regulation to be part of a massive US government bailout.
It marked the end of an era for investment banks on Wall Street. Morgan Stanley was formed in 1935 in the wake of the Great Depression.
Japanese banks have been conservative lenders since their own crisis, shying away from high-risk subprime assets lent by US banks to high-risk American customers.
Much like the turmoil on Wall Street, the Japanese crisis was set off by the collapse of a speculative real-estate boom. Bad policy moves set off a "lost decade" of recession and deflation that shattered Japan's post-World War II economic miracle.
Nomura had been weighing a deal with Lehman before the 150-year-old firm collapsed.
Last year, Nomura bought Instinet Inc., a US online brokerage firm, for 1.2 billion dollars as part of its effort to expand overseas.