announced today that it agreed to purchaseSmiths Aerospace
, a UK-based supplier of integrated systems for aircraft manufacturers and components for engine builders, for $4.8bn.
According to a statement, the acquisition will broaden GE’s offerings for aviation customers by adding Smiths 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.
“Smiths Aerospace is a world-class business and a great extension of our Aviation business,’ said GE Chairman and CEO Jeff Immelt. ‘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.
Smiths Aerospace, which is part of Smiths Group, has more than 11,000 employees and had $2.4bn 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. Smiths also has a major presence on new aircraft such as the Boeing 787, Airbus A380 and the Joint Strike Fighter.
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 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.
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.