GE is buying Smiths Aerospace

By Tom Stundza -- Purchasing, 1/17/2007 8:56:00 AM

General Electric is buying Smiths Aerospace, a British-based supplier to aircraft manufacturers, for $4.8 billion in cash. Smiths Aerospace, a unit of Smiths Group, produces integrated systems for flight management, electrical power management and control of mechanical functions. The company has 21 manufacturing plants in the U.S. and Canada, 12 in Great Britain and four in the Asia Pacific region. Jeff Immelt, GE's chairman and chief executive, says in a statement "We have had a long-term commitment to improve the technology base of the company and to invest in fast growth, hi-tech sectors. This [deal] is very consistent with long-term strategy of the company." The aerospace industry is benefiting from strong plane orders amid major new projects from manufacturers such as Airbus, with its A380 super jumbo, and Boeing, with its mid-sized 787. Smiths Aerospace is supplying both, as well as Lockheed Martin's F-35 Joint Strike Fighter. Smiths Group and GE also have agreed to set up a joint venture to operate the British firm’s detection and security businesses, to be owned 64% by the London-based firm and 36% by the Fairfield, Conn. Industrial conglomerate. All these deals are the latest in a string from GE as the world's second-biggest company by market value looks to tap fast-growing, high-tech markets to offset a weaker performance at its traditional industrial businesses.