General Electric to buy Smiths aerospace unit for 4.8 billion dollars in cash

General Electric Company 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, reports.

GE plans to buy about $7 billion in non-financial assets this year, Immelt said at a December meeting with analysts. He has spent almost $70 billion on acquisitions since taking the helm in 2001, and people familiar with the talks said last week that he is seeking as much as $10 billion in an auction of GE's plastics unit.

Analysts including Merrill Lynch & Co.'s John Inch and Credit Suisse's Nicole Parent said he may funnel some of the proceeds into more acquisitions. She last week identified aerospace as one possible market, and analysts said Immelt's $7 billion goal excludes any purchases made with the plastics sale proceeds, Bloomberg reports.

The British company has four divisions involved in the aerospace, detection, medical and specialty engineering sectors. It employs 32,000 people at more than 250 facilities in 50 countries, Reuters reports.

Source: agencies

Prepared by Alexander Timoshik

Subscribe to Pravda.Ru Telegram channel, Facebook, RSS!

Author`s name Alex Naumov