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AMSTED Successfully Completes Tender Offer for Varlen

16 August 1999

AMSTED Successfully Completes Tender Offer for Varlen; Merger Creates $2 Billion Transportation Equipment Leader

    CHICAGO, Aug. 15 -- AMSTED Industries Incorporated, a leading
manufacturer of products for the rail, truck and auto components industries,
today announced that it has successfully completed its tender offer for the
outstanding shares of Varlen Corporation for $42 per share in
cash.
    The tender offer expired at 12:00 midnight New York City time on Friday,
August 13, 1999. Approximately 15.8 million Varlen shares, representing
approximately 93% of the total number of the shares outstanding, were tendered
and accepted for purchase pursuant to the tender offer.
    As the owner of over 90% of the outstanding shares, AMSTED is entitled to
merge with Varlen without the need for a vote of Varlen shareholders.  AMSTED
expects to complete the merger Monday, August 16, 1999.  Under the merger
agreement, Varlen shareholders who did not sell their shares in the tender
offer will be entitled to receive the same $42 per share cash price that was
paid in the tender offer.  Forms and instructions for obtaining payment of the
merger consideration will be distributed shortly.
    The merger creates a worldwide transportation equipment leader with
annual sales of approximately $2 billion.  As a result of the merger, AMSTED
will have 10 principal operating companies made up of six from AMSTED and four
from Varlen.
    "With the Varlen acquisition,  AMSTED will be a leading supplier in rail,
truck and auto components," said Arthur W. Goetschel, AMSTED's Chairman,
President and Chief Executive Officer.  "Combined, we will be able to provide
our customers with services and products that are unmatched in our industries.
We welcome the Varlen management and employees to the AMSTED family and look
forward to building our businesses together."
    AMSTED secured financing from Citibank, N.A. as agent and Salomon Smith
Barney as arranger to complete the transaction.  Salomon Smith Barney also
acted as financial advisor and provided a fairness opinion to AMSTED.
Winston & Strawn and Schiff Hardin & Waite provided legal counsel to AMSTED.
    Based in Chicago, AMSTED Industries Incorporated is a diversified
manufacturer of products for the rail, construction and building and general
industrial markets.  With Varlen, AMSTED has annual revenues of approximately
$2 billion, manufactures its products in over 50 plants worldwide and is one
of the largest 100% employee-owned companies in the country.