Construction equipment manufacturing giant Caterpillar Inc has paid LucasVarity $1,325m for its VarityPerkins diesel engines business.
Explaining the reasons for the sale, LucasVarity chief executive Victor Rice said: “The on-highway and off-highway sectors are converging, driven largely by the progressive emissions legislation. Perkins has a limited presence in the on-highway market.
“Following extensive analysis, we concluded that it would have been very challenging to develop a major on-highway business organically by the time emissions legislation converge and securing such a position through acquisitions is not economically viable.” Varity Perkins had sales of $1,081m in the year to 31 January 1997 and made $97m operating profit before exceptionals. LucasVarity’s accounts attribute consolidated net assets of $150m to VarityPerkins.
