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Wednesday, January 6, 1999 Published at 12:29 GMT

Business: The Company File

LucasVarity confirms merger talks

Shareholders may not be able to put the brakes on a US move

LucasVarity, the car parts group which was recently involved in a row with its shareholders over plans to move to the US, may end up as an American group after all.

LucasVarity has confirmed it is in talks with rivals which could lead to a merger.

The group said that it was discussing a wide range of "strategic partnerships" including mergers, joint ventures, acquisitions and alliances.

Preliminary discussions

It has held preliminary discussions with a number of companies but said there was no certainty they would result in a deal.

LucasVarity has been forced to launch an extensive strategic review after its plans to move to the US were foiled by shareholders opposed to the boardroom decision. Investors claimed that LucasVarity's executives wanted to move to the US to capitalise on the larger salaries available there.

The group's shares motored in early trading, rising 2% to 220p by 1238 GMT.

A transatlantic merger deal has been the long-standing ambition of LucasVarity Chief Executive, Victor Rice, and merger speculation has centred on LucasVarity's US rivals TRW and Tenneco.

LucasVarity is the the product of a 1996 merger between Britain's Lucas Industries and US group Varity.