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Caterpillar takes over Perkins

18th December 1997
Page 18
Page 18, 18th December 1997 — Caterpillar takes over Perkins
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Which of the following most accurately describes the problem?

by Toby Clark • Long-established engine builder Perkins has been bought by US engine maker Caterpillar in a deal that creates the largest diesel engine company in the world.

Caterpillar paid £803m in cash for Perkins, which has plants in Peterborough, Stafford and Shrewsbury with a total of 4,800 employees. The price suggests that this is no assetstrip ping exercise, and there is no suggestion that any of the sites will close.

Marion King, Perkins' European PR manager, is optimistic about the deal: "The feeling here is one of excitement—we're coming back to a company that understands engines".

Caterpillar is already Perkins' biggest customer, using the 1000 Series engine (an industrial version of the Phaser) for generator applications and for powering sub200hp construction equipment. Caterpillar concentrates on engines of 200hp and over: dwindling sales of Perkins' Tx 1 2 -litre engine, and uncertainty

Perkins' Phaserthe biggest buyer of the similar 1000 Series is Caterpillar.

that it will be able to reach Euro-3 emissions standards, suggest that Perkins will adapt a Cat design for future heavy truck applications.

But the deal brings into question another of Perkins' deals: the firm has recently renewed an agreement with US firm Navistar to distribute the Peregrine/1300 Series in Europe—a direct competitor for Caterpillar's 3126 range.

Perkins has in recent years been known as VarityPerkins, reflecting its ownership by LucasVarity plc, but the holding company has been keen to cut costs and to concentrate on its other automotive and aerospace interests.

There are technical issues, too: Victor Rice, chief executive of LucasVarity, says: "The on-highway and off-highway sectors are converging, driven largely by progressive emissions legislation. Perkins has a limited presence in the on-highway market.., it would have been very challenging to develop a major on-highway business organically


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