FAIRFIELD, Conn.—(BUSINESS WIRE)—January 14, 2007— 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."
Detection Joint Venture
GE also announced today that it has signed a letter of intent with
Smiths Group to create a detection joint venture with a portion of its
Security business. The JV will include GE Security's Homeland
Protection business and Smiths Detection. Upon completion of the
transaction, GE will own 36% and Smiths 64% of the joint venture and
both companies will have board representation, with Smiths having a
majority. The definitive agreement is expected to be signed in the
second quarter. The transaction will be subject to approval by Smiths
shareowners as well as customary regulatory reviews and will be
conditioned on the completion of GE's acquisition of Smiths Aerospace.
Louis Parker, President and CEO, GE Security, said, "Today's
announcement is a big step in aligning our detection team with a
business that has complementary technologies and creates a joint
venture that will be able to offer a full-service suite of detection
solutions on a global basis."
Immelt said, "We continue to believe security is a great long-term
growth opportunity for GE. We have deep technical expertise and are
experiencing strong growth in our security platform. This joint
venture enhances our long-term position in the industry."
The joint venture, to be called Smiths GE Detection, will be
headquartered in London. Keith Butler-Wheelhouse will serve as the
chairman of the board. Stephen Phipson, currently group managing
director of Smiths Detection, will serve as the president.
Keith Butler-Wheelhouse said, "Together we are creating a
world-class business. GE's Homeland Protection business has a terrific
leadership team, committed employees and exciting technology. Our
combination of technologies will result in the development of more
effective products and services to help make the world a safer place."
Smiths Detection is headquartered in London, U.K., has about 2,000
employees and had about $700 million revenues in 2006. GE Homeland
Protection is headquartered in Newark, CA, has about 700 employees and
had about $300 million in revenue during the year.
A presentation for analysts and investors by Keith
Butler-Wheelhouse and Jeff Immelt will be held at 9:30 a.m. UK time
(4:30 a.m. ET) at the Savoy Hotel, Strand, London WC2R OEU. The event
will be webcast live at www.smiths.com. Alternatively, interested
parties can listen in live by calling +44 (0) 20 7138 0816 or +1 718
A joint media conference will be hosted today at 11:30 a.m. (UK
time) at the Savoy Hotel. Also, an interview with Keith
Butler-Wheelhouse and Jeff Immelt can be seen on www.Cantos.com.
GE) is Imagination at Work -- a diversified technology,
media and financial services company focused on solving some of the
world's toughest problems. With products and services ranging from
aircraft engines, power generation, water processing and security
technology to medical imaging, business and consumer financing, media
content and advanced materials, GE serves customers in more than 100
countries and employs more than 300,000 people worldwide. For more
information, visit the company's Web site at www.ge.com.
About GE Aviation
GE-Aviation is one of the world's leading producers of large and
small jet engines for commercial and military aircraft. We also supply
aircraft-derived engines for marine applications and provide aviation
services. For more information, visit www.geaviation.com.
About GE Security
GE's Security business is a wholly owned subsidiary of the General
Electric Company (NYSE:
GE) focused on communication and information
technologies for security and life safety solutions. GE Security has
more than 6,500 employees with operations in over 35 countries and is
represented by some of the best-known brand names for intrusion and
fire detection, access and building control, video surveillance,
explosives and drug detection, key management and structured wiring.
The Homeland Protection business is focused on explosives and
narcotics detection and has approximately 730 employees located in the
U.S., Europe and Asia. For more information, visit www.gesecurity.com.
About Smiths Group
Smiths is a global technology company, listed on the London Stock
Exchange. Smiths Group is a world leader in the practical application
of advanced technologies. Its products and services make the world
safer, healthier and more productive. Smiths Group has four divisions:
Aerospace, Detection, Medical and Specialty Engineering. It employs
32,000 people and has over 250 major facilities in 50 countries. For
more information visit www.smiths.com
About Smiths Aerospace
Smiths Aerospace is a leading transatlantic aerospace systems and
equipment business, with more than 11,000 employees and $2 billion
revenues globally. The business holds key positions in the supply
chains of all major military and civil aircraft and engine
manufacturers and is a world-leader in digital, electrical power,
mechanical systems, engine components and customer services. For
further information visit www.smiths-aerospace.com
About Smiths Detection
Smiths Detection is part of the global technology business Smiths
Group. It offers advanced integrated security solutions for customers
in civil and military markets worldwide and is a leading technology
developer and manufacturer of sensors that detect and identify
explosives, chemical and biological agents, weapons, and contraband.
Its advanced technology security solutions also include Smiths Heimann
x-ray imaging systems, millimeter-wave technology and a specialist
software supply business for the management of large sensor and video
surveillance networks. Separate business units focus on related
products for the life sciences, and food manufacturing industries. For
more information visit www.smithsdetection.com
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