GE snaps up Smiths Aerospace for $4.8 billion

General Electric Co will acquire the aerospace unit of UK-based Smiths Group to strengthen its presence in the aviation equipment market. GE will pay $4.8 billion in cash, and the deal is subject to regulatory approvals and approval by Smiths' shareholders.

GE is the largest manufacturer of aircraft engines, and its financial services division is the largest player in commercial aircraft leasing.

Smiths Aerospace has more than 11,000 employees and had $2.4 billion in revenues in 2006. Smiths Aero 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 generation aircraft such as the Boeing 787, Airbus A380 and the F-35 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 organisation.

GE Aviation, 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 aero-derivative engines for marine applications. GE Aviation also operates a worldwide network of engine services facilities.

The combined entity would be a major supplier of critical components to aircraft and aircraft engine manufacturers. Combined annual revenues would exceed $15.5 billion with an employee base of nearly 28,000.