Nomura CEO, Kenichi Watanabe, today gave a presentation about the acquisition of the former Lehman Brothers operations in Europe & ME, Japan, Asia (ex-Japan) and in India.
Europe and ME:
Equities and investment banking operations (approx 250 people)
Fixed income staff (approx 150 people)
approx. 1100 people
approx. 1500 people
three subsidiaries, in total approx 2900 people
LB Services India, IT, Global servicing
LB Financial Services India, research services
LB Structured Finance Services, Capital Markets Support and Analytics
Nomura is strong in mutual funds (74.2% of business)
Lehman is strong in hedge funds (56.8% of business)
Nomura is strong in retail
Lehman is strong in wholesale
Nomura plans three phases:
Phase 1: x-Lehman staff join Nomura
Phase 2: start joint operations
Phase 3: promote efficiency
Phase 4: create synergies
Q&A (there was an extensive Q&A session), selected questions were:
Question: Could the Lehman acquisition be seen as a “reverse takeover”, ie Lehman people taking over Nomura?
Answer: any kind of takeover, foreign staff taking over, new hires taking over, long term employees taking over is ok for Nomura, if it makes the customers, shareholders and employees happy.
Question: how does Nomura plan to cover the acquisition costs, how does Nomura plan to become profitable, and could there be cuts in headcount?
Answer: we will right-size in each business area according to the necessities in each business area, and in some business division we are hiring and increasing headcount.
Question: what about highly paid “talents” and high bonus payments? Could there be friction with existing Nomura employees?
Answer: Nomura already has several thousand employees with about 50 or more nationalities, and some are paid more than the CEO of Nomura, so we are already familiar with this situation. Currently Goldman-Sachs CEO and top executives have announced that they will not receive any bonus payments. We will hope that this will be understood in our company as well.
Question: Will the acquisition mean an end to lifetime employment and bring the introduction of performance based payment?
We must make sure that we satisfy our clients, we will focus to deliver the services our clients need.
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