Llyods TSB has today revealed its plan for an expected takeover of £12.2bn of HBOS and has labelled the takeover as a unique opportunity. It allows the financial firm to increase market share and cut costs as two of the UK’s biggest financial services comes together. The takeover could see Llyods TSB making savings of £1 billion a year. However, a consequence of this is that there will be a lot of job cuts as the merger will see many departments having many people doing the same role. Llyods TSB have rubbished claims that this could be 40,000 jobs which would be a disastrous move for the people of the UK as the credit crunch kicks in.
Under normal circumstances this deal would have not be allowed to go ahead by the competition commission as it would be seen as a clear monopoly in the market. However, because of the way the economy is Alistair Darling, chancellor, said that without the move the outlook was very bleak for the economy in the UK. However, there have been claims that this was a bit of a rushed deal because of the acceptance of two of the biggest financial organisations merging.
However, this has been denied by the chancellor who has said that he has known for several weeks and the deal wasn’t just done over night. The buyout deal is actually a rescue deal with HBOS getting into trouble with their share prices fallen heavily in the past few weeks. As the credit crunch kicks in who will be its next target?
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