Federal-Mogul pulls LucasVarity bid
SOUTHFIELD, Mich. (Feb. 11) — Truck and automotive parts conglomerate Federal-Mogul Corp. said it has dropped out of the bidding for LucasVarity plc, clearing the way for TRW Inc. to proceed with its own deal.
Cleveland-based TRW has offered $6.53 billion US in cash, an offer Federal-Mogul said it cannot match after borrowing and using cash reserves to fund 10 acquisitions last year. Federal-Mogul had offered a combined cash-and-stock offer.
LucasVarity and TRW say they expect their transaction to be completed by the end of March.
TRW, the largest U.S. maker of automobile air bags, and LucasVarity together could provide front-end systems for cars by combining LucasVarity brakes and TRW steering and suspension parts. The companies expect their merger to save $200 million a year, more than Federal-Mogul and LucasVarity can generate.
LucasVarity recently sold its heavy-duty braking systems business to Meritor Automotive of Troy, Mich.
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