LucasVarity, the UK-based aerospace and automotive company, is to be bought by TRW of the USA for $7 billion cash - although the deal has been thrown into uncertainty by fellow-US player Federal Moghul, which may increase an earlier offer of $6.4 billion in cash and stock.
The open tug-of-war between the two auto-parts specialists comes after weeks of speculation and behind-the-scenes bargaining.
Though it is LucasVarity's automotive interests that lie at the heart of the take-over battle, initial indications suggest that Cleveland, Ohio-based TRW will retain the Birmingham, UK-based company's aerospace interests.
Around $1.2 billion, or about 18% of LucasVarity's annual $6.8 billion turnover, is generated by its aerospace business. It has sites in the USA, France, Singapore and Canada, as well as the UK, and joint ventures in China, Germany, Indonesia and Spain. Product lines include engine control systems, fly-by-wire systems and actuators.
TRW has extensive space, defence and information systems interests, which contribute $4.7 billion to its annual turnover of $11.9 billion, representing 40% of sales.
Federal Moghul is engaged mainly in the automotive sector, and might choose to divest itself of LucasVarity's aerospace activities should a sweetened bid prove successful.
Source: Flight International
