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Smiths scoops up TI Group
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September 18, 2000: 5:16 a.m. ET
UK engineering firm buys aerospace co for £1.94B to bolster parts business
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LONDON (CNNfn) - British engineering firm Smiths Industries PLC Monday said it plans to purchase aerospace concern TI Group PLC for £1.94 billion ($2.72 billion) in stock to bolster its business supplying airplane parts.
The deal gives TI shareholders will receive 0.46 of a Smiths share in exchange for each TI share, along with an interim dividend of 12 pence a share. Shareholders of Smiths will own 57.6 percent of the enlarged company, TI said in a statement.
 The agreement marries Smiths' expertise with aerospace production, particularly pilot controls for Boeing Co. (BA: Research, Estimates) airplanes, with TI's activities in producing engine parts and seals for Toulouse, France-based Airbus Industrie.
The combined company will have sales of about £3 billion and is expected to generate savings of roughly £125 million in the first year. Smiths also makes industrial and hospital equipment, while TI's activities extend to automotive and marine equipment.
TI Group said Friday that it was considering spinning off its automotive systems unit, prompting analysts to predict that the company would then divest its other three units.
TI (LSE:TI) shares rose 15.25 pence, or about 4 percent, to 390 pence on the London Stock Exchange, while Smiths (LSE:SMIN) shares fell 70 pence, or about 3.5 percent, to 765 pence. 
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