Smiths and GE Dissolve Joint Venture Plans
Smiths management explained in its conference call that neither company plans to buy the other’s detection business. Fiscal 2007 revenue for Smiths Detection rose 6%, 10% in constant currency, to £438 million ($842.3 million) (see page 12), led by a doubling of sales for its Ports and Borders sector. Many observers speculate that the termination of the planned joint venture was one of the factors that led the announcement of Mr. Butler-Wheelhouse’s retirement.
London, UK 9/19/07; 9/26/07—Smiths has announced that it will not proceed with its planned joint venture for detection technologies with GE Homeland Protection (see IBO 1/15/07). The announcement stated that the companies “were unable to agree on a strategic vision for the combined business.” Smiths would have owned 64% of the new company with GE owning the remaining stake. The existing joint cooperation agreement between the companies is unaffected. A £35 million ($69.8 million) break-up fee will not be paid because both parties agreed to dissolve the agreement. On September 26, Smiths reported fiscal 2007 results and announced that Philip Bowman, former CEO of Scottish Power and Allied Domecq, would replace Keith Butler-Wheelhouse as CEO effective December 10.
