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Smiths Group, the London-listed international conglomerate, has announced a break-up of its businesses following pressure from activist investors.
Smiths, which has a market value of £6.4bn, said on Friday it would sell or demerge two of its four core divisions and return “a large proportion” of the proceeds to shareholders, while adding £350mn to a £150mn share buyback programme due for completion in March.
Shares in the group jumped 11 per cent in morning trading.
It said it aimed to announce this year a sale of Smiths Interconnect, which makes specialist connection devices, followed by a demerger or sale of Smiths Detection, which makes scanners used in airport security checks.
The announcement comes less than a year after chief executive Paul Keel, who had defended the group’s structure, left for a US company half its size.
US activist investor Engine Capital wrote to Smiths’ board this month calling for it to follow other conglomerates and explore a break-up, arguing that Smiths had “significant value that is currently unrealised due to its conglomerate structure”.