Barclays to pay $1.75 billion for some Lehman assets

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

Lehman's bankruptcy filing came as Merrill Lynch & Co agreed to be bought by Bank of America Corp and just months after the fire sale of Bear Stearns to JPMorgan Chase & Co. The credit crisis will now leave just two of the top five Wall Street investment banks standing alone.

PRIVATE EQUITY INTEREST

Barclays deal does 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.

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

Barclays Capital, Credit Suisse, Deutsche Bank and JPMorgan Cazenove Ltd advised Barclays. Clifford Chance LLP and Cleary Gottlieb Steen & Hamilton LLP were its legal advisers.

(Additional reporting by Paritosh Bansal in NEW YORK, Raji Menon in LONDON and Jessica Hall in PHILADELPHIA)

(Editing by Phil Berlowitz and Louise Heavens)