On the UP: LucasVarity

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The Independent Online
TRW, the top US maker of automobile air bags, agreed to buy LucasVarity for $6.6bn (pounds 4bn) in cash, outbidding Federal-Mogul in the largest acquisition ever in the auto-parts industry. The offer of 288p a share is 34 per cent more than the price of LucasVarity stock last Friday, the last trading day before Federal-Mogul made public its bid of 280p a share.

TRW wants to strengthen its auto business, which provides 60 per cent of its revenue, before selling it to focus on its faster- growing space, defence and technology unit. The auto-parts industry is consolidating as companies try to expand internationally and cut costs. Federal-Mogul said it would decide whether to raise its bid after studying TRW's offer.