Press Release: Flight International 15-21 Spetember 1993
Dowty has sold its fuel-systems business to Lucas Industries for nearly £19 million, as both UK groups move close to completing reorganisation plans designed to focus on their core activities.
The Dowty business, which has sales of £20 million and a 400-strong workforce, is to be absorbed into the Lucas hydro-mechanical fuel-control operation in Birmingham, which employs 700 people.
Lucas says that the combined operation, with sales of £55-60 million, will reinforce its position as Europe’s leading manufacturer in aircraft fuel systems. It should also “enhance future profitability”, once the integration is complete.
The sale brings Dowty near to completing the reorganisation which began after the group’s takeover by the TI Group in 1992. Under new ownership, the Dowty aerospace business has been tightly focused around leading positions in propellers, landing gear (now now the subject of joint venture talks with Messier-Bugatti) and engine rings. The alternator business has also been kept back from the Lucas deal.
Dowty is still in negotiations over the sale of the remaining non-core defence electronics businesses, but expects to announce a buyer shortly.
Lucas has also been engaged in a year-long restructuring programme, announced in October 1992. Over $80 million has been raised so far, through disposals of a string of non-core businesses, and it is on course to reach the targeted £100 million when the company’s annual results are re-leased in October.
The defence fabrication plant in Burnley, UK, and the Switchgear gear operation in Coventry, UK, are for sale. Although Lucas admits that attention has focused on divestments, it stresses that the rationalisation “does not rule out buying businesses if they make a good fit”.