ERF snapped up by Western Star
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by Miles Brignall • ERF, the UK's last high-volume independent truck manufacturer, is to be taken over by the Canadian truck maker Western Star in a cash deal valuing the Sandbach firm at 1:27.4m.
The deal is described as a merger of two companies "with a great deal in common" by ERF chairman Peter Foden and Western Star chairman Terry Peabody. ERFs board is supporting the offer of £2.75 per share; it says a 54% majority of shareholders have already agreed to the sale.
Foden will stay on as chairman and Peabody will join ERF's board. They promise that there will be no job losses as a result of the deal, hut warn that this might change if there is a further decline in truck sales around the world.
ERF and Western Star will continue to trade independently but Peabody says his firm and ERF complement each other's strengths and markets. "We will be pooling our engineers in research and development as well as buying power," he says. "We will take ERF cabs and sell their trucks in Australia; ERF will benefit from Western's input into other markets around the world. Both companies use proprietary drivelines including Cummins engines.
Rumours of a takeover had circulated the industry for a number of weeks.
L ERF made pre-tax profits of L1.8m on sales of £218m for the year ending 30 March. Profits were down from last year's ,E2.3m, despite being boosted by the sale of 70% of its South African subsidiary for £800,000,