Nomura to buy 3 Lehman affiliates

Japanese major to retain 3,000 staff of the Indian firms.

Japanese finance major Nomura Holdings on Monday announced the acquisition of three more affiliates of Lehman Brothers in India, including the business process outsourcing (BPO) unit in Powai.

The latest deal covers Lehman Brothers Services India, Lehman Brothers Financial Services (India) and Lehman Brothers Structured Finance Services — all specialised service companies based at Powai in Mumbai, Nomura said in a statement.

This follows Nomura’s announcements last month to acquire Lehman’s franchise in Asia Pacific and its equities and investment banking operations in Europe and West Asia.

Unlike the previous deals, where Nomura did not acquire the assets and liabilities of any of the Indian affiliates of Lehman, the acquisition of the three companies announced on Monday includes all assets as well as issued and outstanding shares.

“Under the agreement, we will be offering employment to the staff of the three companies. The acquisition also includes their assets,” said a Nomura spokesperson, refusing to disclose the deal size.

In the earlier transactions, only the manpower at Lehman’s investment banking and institutional equity operations was included. In case of the earlier businesses, Nomura has already offered fresh contracts to the employees in India.

Lehman’s operations in Powai were set up in 2005 with the aim to provide operational support, particularly in the area of information technology, across its network. “The acquisition (of the three companies) will add to Nomura’s global network approximately 3,000 employees, including 1,200 IT professionals. This will significantly enhance Nomura’s IT functions and other support operations, including financial control and risk management, as well as analytical support for various business verticals such as investment banking, capital markets, research and prime services,” the statement said.

Lehman’s structured products transactions in India were estimated to be in the region of Rs 3,300 crore. Soon after Lehman filed for bankruptcy last month, the Reserve Bank of India (RBI) and the Fixed Income Money Markets & Derivatives Association of India (Fimmda) stepped in to ensure that the restructuring of these products took place in a systematic manner without destabilising the market.

“The acquisition of Lehman’s operations in Powai is an important component of our global expansion strategy. It will allow us to significantly enhance our global service platform to support the business expansion that the combined talents of Nomura and Lehman will drive forward,” Nomura President and CEO Kenichi Watanabe said in the statement.

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