Newswatch: Lucas' last week as independent
Auto and aerospace components manufacturer Lucas Varity is expected to report pre-tax profits of #350m next week in what will be its last annual reports as an independent UK company.
The business, which had annual revenues of #4.7bn in 1997, has been acquired by US-based automotive and defence company TRW Inc. Due to the merger, which will create a combined business with a turnover of nearly #19bn, this year’s profits announcement is being made without the usual fanfare of analysts’ briefings.
The past year has been traumatic for the company leading up to the merger which was finally approved by the European Commission in January. The commission’s investigation concluded that the deal would not create a dominant position which would impede competition in the European Economic Area.
Lucas had looked to list in the US last year, partly to take advantage of US rules which would have allowed it to execute a proposed 20% share repurchase program. UK rules limit repurchases to 3% to 4% a year. The move, however, was rejected by Lucas shareholders.
Facing these challenges has been Neil Arnold, the group finance director who has risen through the ranks at Lucas Varity. He joined the business as a graduate trainee in 1969 and was made a board member in October 1997.
The companies aim to combine their complimentary businesses – Lucas is a major braking system supplier to car makers like Renault – to provide a broader product range and greater mass.