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LucasVarity Posts Change of Domicile Documentation to Shareholders

1 October 1998

Change of Domicile Documentation Posted to Shareholders

    LONDON, Oct. 1 -- LucasVarity plc announced that
documentation in connection with the Group's proposed change of domicile is
being posted to shareholders today.  The meetings to obtain shareholders'
approval will be held on 6 November 1998.

    In a letter to shareholders, Ed Wallis, Chairman, said:
    "The proposal to change the domicile of the LucasVarity Group to the
United States is the result of long and careful consideration by the Board.
In reaching our decision, we have taken extensive independent advice.  The
Board unanimously recommends the proposal and firmly believes it is in the
best interests of the Company and will create long term shareholder value.

    The Board believes that the proposed change of domicile will:
    -- Situate LucasVarity amongst its natural public automotive company peer
       group in the United States.
    -- Provide access to the deep pool of US capital dedicated to the
       automotive and aerospace sectors, which is presently only partially
       available to LucasVarity as a non-US incorporated company.
    -- Allow greater flexibility for LucasVarity to manage its capital base,
       aligning its capital structure and cost of capital more closely with
       its US peer group.  In particular, UK accounting and tax constraints
       have limited LucasVarity's share repurchase capacity to approximately
       3-4 per cent. per annum.  These constraints will be eliminated if
       LucasVarity becomes a US company, allowing the new US parent company to
       execute its proposed 20 per cent share repurchase programme.
    -- Better position the Company to compete on equal terms with its peers
       for acquisition opportunities, most of which are located in the United
       States.  Specifically, it will give the Company full flexibility to
       finance transactions with equity and/or debt.  This flexibility is
       especially important given the rapid pace of consolidation in the
       automotive and aerospace industries.

    The change will also reflect the continuing trend in the Company's
ownership from a predominantly UK shareholder base to one which the Company
estimates now has a higher proportion of US than UK beneficial shareholdings.
These factors in combination are, the Board believes, unique to LucasVarity
among major UK companies."

    Website: http://www.lucasvarity.com

    This announcement has been approved for the purposes of Section 57 of the
Financial Services Act 1986 by Lazard Brothers & Co., Limited and Morgan
Stanley & Co. Limited, each of which is regulated by The Securities and
Futures Authority Limited.  Each of Lazard Brothers & Co., Limited and Morgan
Stanley & Co. Limited is acting as joint financial adviser to LucasVarity plc
and LucasVarity Corporation and joint sponsor of LucasVarity Corporation in
relation to the proposed listing of LucasVarity Corporation on the London
Stock Exchange and no-one else, and will not be responsible to anyone other
than LucasVarity plc and LucasVarity Corporation for providing the protection
afforded to customers of Lazard Brothers & Co., Limited and Morgan Stanley &
Co. Limited nor for providing advice in relation to the proposals.
    This announcement does not constitute or form part of any offer of or any
solicitation of an offer for securities.  Any acquisition of, or application
for, LucasVarity Corporation Shares should be made only on the basis of
information contained in the listing particulars which have been issued in
connection with the proposed application for listing.
    Statements included herein which are not historical facts are forward
looking statements.  Such forward looking statements are made pursuant to the
safe harbour provisions of the US Private Securities Litigation Reform Act of
1995 (the "PSLRA").  The forward looking statements involve a number of risks
and uncertainties and are subject to change at any time.  In the event such
risks or uncertainties materialise the Group's results could be materially
affected.  The Company has no obligation under the PSLRA to update any forward
looking statements and does not intend to do so.