Industrial giant Smiths Group bows to investor calls for break-up
Bosses at engineering conglomerate Smiths Group are plotting to break up the FTSE 100 business, following calls from investors.
The London-listed firm is to sell its Smiths Interconnect business, which makes broadband connection and antenna parts, by the end of 2025.
It will hive off its Smiths Detection business, which makes X-ray machines for airports, it said on Friday.
Smiths is among the UK's biggest industrial firms, with four companies stretching across continents and industries.
It makes parts for the energy, aviation, aerospace, construction, automotive and semiconductor sectors among others, employing 15,000 people across 50 countries.
But it has come under pressure to sell off parts of its business by US investment group Engine Capital.
Engine is reported to have a stake of about 2% in Smiths. It wrote earlier in January that the blue-chip firm's share price could be worth about 60% more if it sold off parts of the business.
Smiths will instead focus on its John Crane subsidiary, which makes seals and parts for heavy industries, and its Flex-Tek business, which makes heating elements.
Roland Carter, who became Smiths' chief executive in March, said: 'We are pleased with the financial and operating performance of the group over recent years, including the recent upgrade to earnings.
He said bosses had spent 'considerable time evaluating the options to maximise shareholder value' and address what he called a 'significant discount' to its shares.
Mr Carter added: 'We are conscious of the impact of making such changes to our people and will do so in a manner that is respectful to our employees, our customers and our suppliers and in the long-term interests of all our stakeholders.'
The company also said it will buy shares worth about £500 million back from shareholders, in a bid to boost returns to investors further.
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