Smiths plots £6bn American merger
Smiths Group has opened talks with US companies over a potential £6bn deal to merge its healthcare operations.
The engineering giant is said to have held early-stage discussions about combining its healthcare arm with a string of companies, including California’s ICU Medical.
The move has been spearheaded by chief executive Andy Reynolds Smith and has been spurred by speculation that it has become an activist investor target. Smiths, which makes devices from airport security scanners and medical equipment to electrical connectors and hoses, has seen its share price endure a choppy ride in recent months.
On Sunday evening a spokesman for Smiths Medical business confirmed that “it is in very early stage discussions about a potential combination of its medical division with ICU Medical, Inc” adding that “the Board of Smiths routinely reviews all options for the Group’s portfolio of businesses to maximise value for Smiths shareholders..
“There can be no certainty that a transaction will be concluded,” they added.
Its stock value took a downward turn in March when the company’s half-year update showed headline pre-tax profits had fallen 12pc to £217m.
Since then, its share price has regained its poise, and is now up 16pc to £17.24 compared to the start of the year. Smiths Medical, the company’s healthcare arm, has a near 8,000 strong global workforce and a strong presence in the US. It recorded revenues of £951m and an operating profit of £209m last year.