Lucas Industries PLC, based in London, and Varity Corp., headquartered in Buffalo, N.Y., said Friday they will merge in a stock swap valued at $4.9 billion, creating a major Anglo-American manufacturer of auto parts.
They will form a British-based holding company, LucasVarity PLC, specializing in components such as brake systems and fuel-injection systems.A Lucas subsidiary, Lucas Western, builds gearboxes for Air Force aircraft at its Park City plant. The company last year was slapped with $106 million in criminal and civil fines for submitting false statements and delivering substandard gearboxes.
The companies, which will have combined annual revenue of about $6.7 billion, said the deal will save them about $100 million a year. A Lucas spokeswoman could not immediately say whether any of the savings will come from jobs losses at either company.
Lucas shareholders will get 62 percent of the merged company's stock, with those shares to be listed on the London Stock Exchange. Varity shareholders will get 38 percent of the stock in American depositary receipts, which will trade on the New York Stock Exchange.
Lucas, of Solihull, near Birmingham in central England, and Varity had previously disclosed they were in talks.