Barclays shares drop in London after $13.5B sale deal for investment unit

Shares in Barclays fell in London Friday after the announcement that it sold its Global Investment unit to U.S. fund manager BlackRock Inc. for $13.5B. Analysts said the deal was a necessity for Barclays, but the market still seemed worried about the bank's long-term prospects. "We regard the BGI disposal as a long-signaled necessity, in order to boost Barclays' core tier 1 ratios to within spitting distance of its peers," said Sandy Chen, banking analyst at Panmure Gordon & Co. "But our longer-term concerns about earnings sustainability & balance sheet risks remain," she said. Barclays shares closed down 4.1% at 292 pence on the London Exchange. Barclays Global Investors is the world's largest asset mgr. with over 3,000 institutional clients and approximately $1.5T of assets under management as of Dec. 31. NY-based BlackRock, which will pay $6.6B in cash & 37.8M shares currently worth about $6.9B, said the takeover will create a firm with combined assets under management of over $2.7T. Barclays will retain a 19.9% stake in the new BlackRock Global Investors, representing a 4.9% voting interest. Blake Grossman, CEO of Barclays Global Investors, will serve as a vice chairman of the combined firm, head of scientific investing, and a member of the Office of the Chairman. Barclays CEO John Varley and President Bob Diamond will join BlackRock's board. Barclays turned to Middle Eastern investors to shore its capital position rather than take on the UK gov