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Caterpillar snaps up VarityPerkins

PLANT giant Caterpillar has bought Peterborough-based engine specialist VarityPerkins for £803 million.

The deal comes into effect On February 1 and covers Perkins' factories in Peterborough, Shrew-sbury and Stafford plus the Manchester parts distribution centre.

Caterpillar group president Richard L Thompson said: 'Per-kins' product line of 200HP and smaller engines is an outstanding complement to Caterpillar's engine business.'

The sale of VarityPerkins took the industry by surprise because it is one of parent company

LucasVarity's core businesses.

LucasVarity chief executive Victor Rice said Caterpillar had been interested before, but this time made an offer that it couldn't refuse.

VarityPerkins has 4,600 staff in the UK. Sales in 1996 were £655 million, with an operating profit of £59 million on engine sales of 250,000 units a year. Caterpillar's sales of engines account for a quarter of its £10 billion revenue.

The move will cause a stir in the plant business because Perkins engines are used by some of Caterpillar's biggest rivals includ-ing JCB and Fermec.

A JCB spokesman said: 'We have a long-standing relationship with Perkins.

'They make extremely good engines and we hope that relationship will continue.'