Salomon to Buy Shearson Asset Management Unit

Salomon Inc. today announced plans to buy Shearson Lehman Hutton Inc.’s asset management arm for $28 million.

The acquisition of Lehman Management Co., which has $2.7 billion of assets under management, will more than double the size of Salomon’s money management operation. Spokeswoman Macy W. Egerton said Salomon has $2.2 billion under management.

Lehman Management, known on Wall Street as Lemco, acts as an adviser to five investment companies and to more than 550 institutional and individual accounts. The acquisition must be approved by the boards of directors and shareholders of the five investment companies, Salomon said in a news release.

Almost all of the investment and research professionals and other employees of Lehman Management will become employees of Salomon Brothers Asset Management.

“We are delighted to have the talented and experienced investment staff of Lehman Management join us,” said John H. Gutfreund, Salomon Inc.’s chairman and chief executive officer.

For struggling Shearson Lehman Hutton, the sale is another step in an effort to revamp its operations. Shearson, which is primarily owned by American Express Co., has been examining each of its businesses to determine which ones to sell as part of a reorganization expected to be completed this year.

After the deal is completed, the names of Lehman Corp., Lehman Investors Fund Inc., Lehman Capital Fund Inc. and Lehman Opportunity Fund Inc. will be changed to Salomon Brothers Fund Inc., Salomon Brothers Investment Fund Inc., Salomon Brothers Capital Fund Inc. and Salomon Brothers Opportunity Fund Inc., respectively.