Global Economics

Nomura Adds More Lehman Businesses & People


Japan's Nomura picks up more businesses from the defunct firm, acquiring Lehman Brothers' IT and outsourcing companies in India

Nomura continues to acquire businesses from Lehman Brothers, announcing on Monday that it will buy the now defunct firm's service providers in India which employ a combined 3,000 people. It also announced that it has hired 150 fixed-income staff from Lehman in Europe.

The Tokyo-headquartered financial services group did not disclose how much it will pay for Lehman Brothers Services India, Lehman Brothers Financial Services (India) and Lehman Brothers Structured Finance Services, all specialised service companies based in Powai in Mumbai.

Nomura announced last month that it will buy most of Lehman's franchise in the Asia-Pacific region as well as its European and Middle Eastern equities and investment banking operations.

Lehman set up the business in Powai in 2005 to support its global network, particularly in the area of information technology and outsourcing. A number of global investment banks including Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS have outsourced operations to India.

The 3,000 employees that come with the India acquisition include 1,200 IT professionals. Nomura said the employees will provide support services in IT, financial control, operations and risk management as well as analytical support within the areas of investment banking, capital markets, research and prime services.

The acquisition of Lehman's operations in Powai "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", says Kenichi Watanabe, president and CEO of Nomura in a written statement.

The 150 fixed-income hires in Europe are in the flow and solutions businesses and will add to Nomura's existing credit, interest rates and foreign exchange businesses, the Japanese bank said. The fixed-income businesses will continue to report to Zenji Nakamura, global head of fixed income.

"We have attracted people in businesses who will provide immediate synergies of scale and scope, and have been identified as key to the evolution of our fixed-income business," says Akira Maruyama, CEO of global markets at Nomura in a different statement with respect to the fixed-income hires.

Nomura also announced on Monday that it has satisfied the conditions necessary to complete the acquisition of Lehman's investment banking and equities businesses in Europe and the Middle East and consequently the deals will close on October 13.

Even in the few weeks since Nomura announced it would take over Lehman's Asia business, it has lost people in the region to Merrill Lynch, UBS and others. Now it must be hoping to tie up the final loose ends and get on with the business of building a world-class investment bank.

Nomura's American depository rights were trading at $12.10 Wednesday morning in New York, up more than 5% from the previous close.

Anand is a writer at FinanceAsia.com.

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