Lehman, Neuberger Close In On Merger Deal

July 14, 2003 (PLANSPONSOR.com) - Lehman Brothers Holding Inc. has announced it is close to a deal to purchase Neuberger Berman Inc.

While a formalized agreement has not yet been reached, both “parties expect the final terms will be worked out over the near term,” Lehman said in a news release. The final price tag is expected in the $3 billion range, people close to the deal told Reuters.

Neuberger Berman, a New York money management firm with approximately $56.3 billion under management, provides clients with a range of investment products, services and strategies including private asset management, wealth management, tax planning, personal trust services, mutual funds and professional securities services for various organizations.   The firm made headlines last December for its coup in building a new Growth Equity Group by hiring away a team of portfolio managers from Northern Trust (See  Neuberger Berman Lures Away Northern Trust Equity Unit ).  Then in April, the Hartford Group unveiled a new program in conjunction with Neuberger Berman, where the asset manager would take on the role of an investment advice fiduciary in assisting plan sponsors in researching, selecting and monitoring of plan investments (See   Hartford Taps Asset Manager for Advisory Service).

Lehman Brothers, a New York-based financial services company, currently offers investment and merchant banking services.   However, the acquisition of an asset-management firm would propel Lehman beyond its traditional bond and underwriting businesses, which the firm has been criticized for relying too heavily on.  For its part, Lehman Brothers said the potential merger would significantly increase its high-margin high net worth and asset management businesses.

After rumors originally surfaced in June that the two firms may be in merger negotiations, it took an 8-K filed with the Securities and Exchange Commission (SEC) to provide confirmation (See  SEC Filing Confirms Lehman and Neuberger Merger Talks ).