GE/SMITHS Virtual de-conglomeration

Two cheers for Smiths Group. While other great British conglomerates like Hanson, BTR and Tomkins split themselves up long ago, the UK group has always resolutely stood by its disjointed bunch of medical, defence and engineering businesses. Now Smiths has made a radical decision to sell off its aerospace business - worth a third of its enterprise value - to GE for £2.5bn. This will whet investors’ appetite for more. At around 16 times this year’s operating profits, the price looks generous. Anal...