Varity, Lucas explore merging

In yet another sign that consolidation among suppliers is far from over, Varity Corp. and Lucas Industries plc are talking about a "potential strategic combination" that would give them more muscle in the increasingly competitive antilock brake market. Varity, which derives more than half its $2.4 billion annual sales from brakes, is a strong player in North America, but not as big as ITT Automotive

In yet another sign that consolidation among suppliers is far from over, Varity Corp. and Lucas Industries plc are talking about a "potential strategic combination" that would give them more muscle in the increasingly competitive antilock brake market. Varity, which derives more than half its $2.4 billion annual sales from brakes, is a strong player in North America, but not as big as ITT Automotive or Robert Bosch GmbH. Its other major business is Perkins diesel engines. Lucas is a major brake supplier in Europe, but draws about 16% of its annual sales from North America, where it also supplies engine-management technology and automotive electronics.

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