Barclays to buy some Lehman assets: source

LONDON (Reuters) - Barclays Plc (BARC.L) agreed to buy bankrupt Lehman Brothers Holdings Inc's LEH.P main investment banking assets for about $2 billion, a source familiar with the situation said on Tuesday.

The deal, which is expected to be announced later on Tuesday or early Wednesday, would unite two big debt trading houses and could stanch the flow of customers fleeing Lehman in the wake of the largest bankruptcy in history.

The deal would include Lehman's core U.S. broker-dealer business, including equity, fixed income, M&A advisory and other assets, the source said.

Barclays won't be buying any of Lehman's real estate, real-estate-backed securities, derivatives positions or over-the-counter trades, The Wall Street Journal reported.

As many as 9,000 Lehman employees would find jobs with the UK bank, the newspaper reported on its website.

The deal will also not include Lehman's investment management division, which includes fund manager Neuberger Berman. On Monday, a person familiar with the situation said a sale of that unit was also close to being announced.

Private equity firms Bain Capital, Hellman & Friedman and Clayton, Dubilier and Rice have placed bids for the unit, the person said. Lehman had planned to sell a majority stake in the investment management unit before filing for bankruptcy, but is now selling the whole unit.

Earlier on Tuesday, Barclays had confirmed it was in talks to buy some of Lehman's assets on terms that would need to be attractive to its shareholders.

Lehman could not be immediately reached for comment.

Barclays was involved in frantic talks over the weekend to rescue Lehman, but quit after U.S. authorities would not guarantee the U.S. investment bank's trading obligations.

That prompted Lehman's New York-based holding company to file for Chapter 11 bankruptcy protection, sending shockwaves throughout world financial markets as a year-long credit crunch claimed another, bigger victim.

One of the bank's top 15 investors, who declined to be named, questioned the merit of pursuing Lehman in the current climate, however.

"Does Barclays not have better things to do with its capital? I don't think it's an environment for banking people to be brave," he said.

Barclays shares closed down 2.5 percent at 305.1 pence. The DJ Stoxx European bank index .SX7P fell 4.3 percent.

Most European bank shares were hit for a second day by fears of more collapses and higher borrowing costs, although U.S. banks surged on hopes for a solution to American International Group Inc's (AIG.N) liquidity crunch.

(Additional reporting by Raji Menon in London and Jessica Hall in Philadelphia)

(Editing by David Cowell, Bernard Orr, Phil Berlowitz)