Smiths Group in talks with ICU Medical about potential merger of healthcare units
British engineering giant Smiths Group said that it is in talks with US-listed ICU medical about a potential merger of their two healthcare divisions.
Smiths said in a statement that the company is in “very early stage discussions about a potential combination of its medical division with ICU Medical, Inc.”
Smiths Group, which is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index, said there was “no certainty” a deal would be concluded.
“The board of Smiths routinely reviews all options for the group’s portfolio of businesses to maximise value for Smiths shareholders,” Smiths said.
Smiths Group’s healthcare division, Smiths Medical, is a leading manufacturer of specialty medical devices for infusion therapy, vascular access and vital care and other specialty products and services. The division has more than 7,000 workers worldwide and operations in over 30 countries, with manufacturing concentrated in the US, UK, Mexico, Italy, Germany, Czech Republic, and China.
Smiths has a market value of around £7bn, while its healthcare unit is reportedly worth around £2bn.
ICU Medical is a California based company listed on Nasdaq with a market capitalisation of $5.6bn.
Smiths Medical reported revenue of £951m and an operating profit of £209m last year while ICU Medical generated revenue of $1.29bn (£970m).
Smiths Group reported disappointing half-year financial figures
Smiths Group posted a lower than expected first-half profit in March. Its pre-tax profit dropped 12 percent to £217m pounds for the six months ending on Jan. 31 and revenues fell by 4.3 percent to £1.55bn pounds.
Smiths Medical, which faced delays to new product launches, reported a 5 percent drop in revenues to 451 million pounds ($600.2 million) for the first half of the year.