Barclays approves 13.5 bln dlr sale of investment unit

August 6, 2009
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, LONDON, Aug 6 – British bank Barclays on Thursday said its shareholders had overwhelmingly approved the sale of its investment arm to US asset manager BlackRock for 13.5 billion dollars (9.4 billion euros).

Barclays said 99.9 percent of voters backed a deal announced in June to sell Barclays Global Investors (BGI) as the bank seeks to shore up its finances without government help.

Under the deal, Barclays will own 19.9 percent of a new company to be called BlackRock Global Investors.

Meanwhile the British bank will realise a net gain of about 5.3 billion pounds (6.2 billion euros, 8.9 billion dollars) to cement its balance sheet.

Barclays last year won a seven-billion-pound capital injection largely backed by investors from Abu Dhabi and Qatar, as it sought to survive the credit crunch without government aid.

However, Abu Dhabi recently sold most of its holding.

Two of Barclays\’ main British rivals, Lloyds Banking Group and the Royal Bank of Scotland (RBS), are now government-controlled, bailed out by the taxpayer in the wake of huge losses arising from the global financial crisis.

RBS was also felled by its role in the 2007 consortium takeover of Dutch bank ABN Amro — following a bid battle which Barclays lost.

The record-breaking ABN deal was clinched before the credit crunch erupted in August 2007, sending global markets slumping and economies tumbling.

The BGI purchase, which has yet to be approved by BlackRock shareholders, will double BlackRock\’s size and create a firm managing assets worth some 2.7 trillion dollars, employing more than 9,000 people in 24 countries, according to the New York-based investment group.

The deal, which includes BGI\’s market-leading iShares trading platform, has also sparked speculation about renewed mergers and acquisitions activity — despite jitters about the world economic downturn.

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