 |
|
 |
|
LLoyds HBoS Merger
|
| | From: http://news.bbc.co.uk/1/hi/business/7622180.stm
Lloyds TSB seals £12bn HBOS deal
HBOS is the biggest mortgage lender in the UK
Lloyds TSB is to take over HBOS in a £12bn deal which will create a banking giant holding close to one-third of the UK's savings and mortgage market.
The firms' boards agreed on Wednesday to a deal, to be formally announced later, valuing HBOS at 232p per share.
The move should calm uncertainty about the strength of Halifax Bank of Scotland after a run on its shares.
HBOS is currently the country's largest mortgage lender with 20% of the market. Lloyds ranks fourth with an 8% share.
Market fluctuations
Details emerged late on Wednesday after a day during which HBOS shares had fluctuated wildly on the London market, climbing as high as 220p and falling as low as 88p.
Shares in the lender eventually closed 19% lower at 147.10p, while Lloyds shares ended unchanged at 279.75p.
How big are these finance firms?
The development comes as the credit crunch has wreaked havoc on some of the world's biggest financial institutions in recent days:
The global financial crisis
Barclays Bank is to buy some Lehman Brothers assets after the fourth-largest US investment bank filed for bankruptcy protection, dealing a blow to the fragile global financial system.
The US Treasury stepped in with an $85bn (£48bn) rescue package to bail out insurance giant AIG amid fears the group, once the world's largest insurer, could face collapse.
Bank of America bought Merrill Lynch in a $50bn deal - making it the third top US investment bank to fall prey to the sub-prime crisis within six months.
In Russia, trading on the country's main stock exchanges was halted after steep falls this week.
In the UK, figures released on Wednesday showed unemployment rising once again as the number of job vacancies fell.
BBC business editor Robert Peston said the government had opted to push through the Lloyds TSB-HBOS tie-up after HBOS voiced concerns that depositors and lenders had begun to withdraw their credit from the bank. | |  |
|
 |
| |
|