Bye-bye HBOS as Lloyds 'super' Banking Group is formed

13 January 2009 / by Rebecca Sargent
Dealings in HBOS shares are expected to stop tomorrow following the approval by a Scottish court of the banking group's takeover by Lloyds TSB.

The Court of Session in Edinburgh rubber-stamped the merger between HBOS and Lloyds TSB yesterday, which has been in the pipeline since October last year.

The two banks will now be known as Lloyds Banking Group and shares in the 'super bank' will start trading on the stock market next Monday January 19.

The merger follows the crippling of HBOS under the pressure of the credit crunch last year. And, although not without opposition, the takeover became what is widely seen as the only realistic way out for HBOS, as Government recapitalisation plans were not enough to keep the group independent.

The deal required court approval yesterday as a formality, because it is being conducted as a Scheme of Arrangement. The deal is now subject to a Reduction Court Order which will confirm associated reduction of capital and is due to take place on Friday.

Shareholders in both Lloyds TSB and HBOS approved the merger late last year, despite failing to take up the new shares that were on offer through the deal. As a result, the taxpayer will now inherit 43 per cent of Lloyds Banking Group as the Government picks up the remaining shares.

Lloyds Banking Group will have around 145,000 staff, with 3,000 branches. The giant will also control 25 per cent of the UK's personal bank accounts and 28 per cent of the mortgage market.

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