GE to Acquire Smiths Aerospace, Extending Aviation Offerings; Plans JV with Smiths Group to Build Global Detection Business

Manufacturing News, Source : The Manufacturer US
Zone : Leadership and strategy
Published : 15 Jan 2007 18:54

FAIRFIELD, Conn.--(BUSINESS WIRE)--General Electric Company (NYSE:GE) announced today that it agreed to purchase Smiths Aerospace, a U.K.-based supplier of integrated systems for aircraft manufacturers and components for engine builders, for $4.8 billion in cash. The deal is subject to approval by Smiths Group shareowners as well as customary regulatory reviews.

The acquisition will broaden GE’s offerings for aviation customers by adding Smiths innovative flight management systems, electrical power management, mechanical actuation systems and airborne platform computing systems to GE Aviation’s commercial and military aircraft engines and related services.

GE Chairman and CEO Jeff Immelt said, “Smiths Aerospace is a world-class business and a great extension of our Aviation business. Like GE, Smiths has built its business by investing in technology and innovative products and services. GE and Smiths fit together well because our product offerings are complementary, and because we have similar customers and deep domain expertise in this industry.

“This acquisition is consistent with our strategy to invest in high-technology infrastructure businesses that deliver strong growth, earnings expansion and higher margins,” Immelt said. “GE Aviation is growing about 10% a year and this acquisition gives us a technology growth platform that will be accretive to our net income and will deliver immediate and future value for our investors.”

Smiths Aerospace, which is part of Smiths Group, has more than 11,000 employees and had $2.4 billion in revenues in 2006. Smiths has a significant presence on most commercial aircraft, including the Boeing 737 and Airbus A320, as well as many military aircraft. More importantly, Smiths has a major presence on new aircraft such as the Boeing 787, Airbus A380 and the Joint Strike Fighter.

Smiths products include flight management systems, airborne platform computing systems, power generation, conversion and distribution products, actuation products and systems for flight control, thrust reversers and landing gear applications, various engine components and a global customer services organization.

Smiths Group Chief Executive Keith Butler-Wheelhouse said, “The Board of Smiths Group is delighted to have reached agreement on the sale of Smiths Aerospace to GE. The consideration reflects the future potential of Smiths Aerospace, which has been created by intense investment in technology over the past five years and by the successful efforts of the dedicated Smiths Aerospace employees.”

GE Aviation is headquartered in Evendale, Ohio, has 26,800 employees and had $13.2 billion in revenues in 2006. Its products include jet engines for civil and military aircraft, as well as aeroderivative engines for marine applications. GE Aviation also operates a worldwide network of engine services facilities.

GE Aviation President and CEO Scott Donnelly said, “The acquisition will broaden our collective expertise. Smiths has made significant investments in its aerospace technologies with resulting success on several exciting new aircraft. Together, we will bring greater product scope and value to our customers.”

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