Lehman, KDB fail to reach agreement over acquisition

11 September 2008

Troubled investment bank Lehman Brothers has ended negotiations with the Korea Development Bank (KDB).

The firm had planned to sell off a stake to the Asian bank in order to shore up its balance sheet, Bloomberg reports.

Shares in Lehman fell by 45 per cent in New York yesterday, as the markets reacted to the news.

Speaking to the news agency anonymously, an insider said that the bank is pressing ahead with talks involving other potential suitors - thought to include Japanese firm Nomura Securities.

KDB backed out of the deal after regulators in the Asian nation told it that the acquisition would be "inappropriate".

Lehman is to announce its third quarter results today, as well as "key strategic initiatives" for the future.

These initiatives are expected to include details of asset sales - with the firm also in talks with private equity firms for the sale of its asset management business.

The release also comes ahead of schedule, thanks to the apparently serious financial troubles at the firm.

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