* Smiths Group agrees sale of unit to ICU Medical
* Withdraws recommendation for TA Associates deal
* Shares up 4%, biggest riser on the FTSE 100 index
(Adds shares, ICU Medical statement, background)
By Yadarisa Shabong
Sept 8 (Reuters) - British industrial technology group
Smiths has agreed to sell its medical division to
U.S.-based ICU Medical for $2.4 billion, it said on
Wednesday, scrapping an earlier $2 billion deal with private
equity firm TA Associates.
Shares in London-listed Smiths rose 4% in early trade as
another bidding war for a British company could be brewing, with
Smiths Medical becoming the latest UK target to draw bids from
both a private equity buyer and a strategic one.
Smiths struck a deal with Boston-based TA Associates in
early August to sell the division, which makes catheters and
other medical devices, but on Wednesday withdrew its backing for
the TA bid in favour of the "superior" offer from ICU Medical.
The deal with the private equity firm in August had sent
shares in Smiths' tumbling as the value came in below market
expectations.
TA did not immediately respond to a request for comment.
California-based medical device maker ICU Medical said the
addition of Smiths Medical syringes, ambulatory infusion devices
and other products would help create a leading infusion therapy
company.
"The combination of these two businesses makes sense for the
medical device marketplace and fits well with ICU Medical's
existing business," ICU Medical Chief Executive Vivek Jain said.
The deal with ICU is expected to close in the first half of
next year, Smiths said, subject to shareholder and regulatory
approval.
Smiths expects initial net proceeds of $1.85 billion from
the sale to ICU, about $50 million more than under the TA deal,
it said. The London-based company continues to propose a
shareholder return of 55% of the proceeds via a share buyback.
In another instance of a takeover battle for a British
medical company, strategic buyer Philip Morris last month
outbid private equity firm Carlyle in the takeover of
asthma drugmaker Vectura.
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak
Dasgupta and Jan Harvey)
Smiths Group (SMIN)