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GE to snap up Finnish medical equipment firm

Helsinki, Dec. 18 (Reuters): General Electric will purchase Instrumentarium, the Finnish maker of critical-care patient monitors, for 2 billion euros ($ 2.06 billion) in cash to bolster its medical systems arm, the firms said on Wednesday.

Shares in Instrumentarium, one of the best performing stocks in Helsinki for the last two years, soared 40 per cent to 38.20 euros on the announcement, off earlier record highs.

The Finnish medical equipment maker said General Electric would offer 40 euros per share, a 47-per cent premium to Instrumentarium’s closing share price on Tuesday.

The boards of both companies had agreed to the deal, which would be launched in 30 days, Instrumentarium said.

GE chief executive Jeffrey Immelt told a news conference in Helsinki that the acquisition would boost the earnings per share in 2003 for the world’s second-largest company by market capitalisation.

“We expect it to be accretive to GE shareholders,” he said.

GE said only on Tuesday it expected to raise between $ 5 and $ 10 billion from asset sales next year as part of a shift into higher growth technology and consumer finance businesses.

“In the changing world of healthcare we have become a more formidable company,” Immelt told a news conference.

GE said Instrumentarium will be combined with its GE Medical Systems unit, allowing it to provide a complementary range of anaesthesia monitoring and delivery, critical care, infant care and diagnostic imaging products. Helsinki will become the European headquarters.

The deal is expected to close in 2003. It needs 80 per cent approval from shareholders in the Finnish company, as well as regulatory clearance.

Analysts in Helsinki said it was a good deal for both sides. They said GE, which makes products ranging from jet engines to household appliances, was buying a profitable firm with a bright future.

Coup for Immelt

The planned acquisition would be a coup for Immelt, who took over from Jack Welch Jr. more than a year ago. He previously headed GE’s medical business.

GE Medical Systems makes imaging, X-ray and other medical devices, and is expected to report revenue of about $ 9 billion in 2002. The GE unit is targeting sales of roughly $ 15 billion by 2005, in part driven by acquisitions.

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