Britain's biggest mortgage lender in $22 billion sale

LONDON -- Lloyds TSB on Thursday announced a $21.9 billion deal to take over struggling HBOS, Britain's biggest mortgage lender.

The government said it would facilitate the deal by overriding anti-monopoly regulations.

Lloyds said each HBOS shareholder will receive 0.83 shares in Lloyds. Existing Lloyds shareholders will hold 56% of the combined company.

The takeover follows days of heavy selling pressure on HBOS shares, which closed Wednesday down 20% at $2.68, a fifth of their value at the start of the year.

The takeover valuation is based on Lloyds' closing share price of $5.01 on Wednesday.

Lloyds said the deal should save the combined companies 1 billion pounds $1.8 billion a year by 2011, and that management's focus will be on preserving jobs in Scotland, where Lloyds is based.

John Hutton, the business and enterprise secretary, said he would present an order in Parliament to extend an exemption on public interest grounds to allow the giant combination.

The combined companies will account for more than a quarter of the U.K. mortgage market and 400 billion pounds, or $715 billion, in savings deposits.