Namal Nawana rejects break-up of Smith & Nephew

Wednesday 09th January 2019 01:31 EST

The new chief executive of Smith & Nephew, Namal Nawana, has rejected a potential break-up of the medical devices company despite pressure from an aggressive American activist investor. Nawana instead is seeking to turn the company around via an expansion drive, including acquisitions. Smith & Nephew is one of the world's biggest medical devices groups, tracing its roots to 1856 when Thomas James Smith opened a pharmacy in Hull. The £12 billion company operates worldwide and generated profits of $879 million in 2017 through the sale of products ranging from knee replacements to wound care.

However, following underwhelming financial performance in recent years there is speculation that it could be exposed to a potential takeover from a rival, including Stryker, a bigger American company. Nawana, 48, was appointed amid speculation that Elliot Advisors, the activist investor, had taken a stake and was pushing the company to offload parts to make it a more attractive takeover prospect.

Nawana said since taking charge he had reviewed the business and had concluded that “there's fantastic value-creation opportunities just by growing our business and operating it better. We believe we've got the core elements that we need... I think we will be a great independent company based on the plans that we have.” He said the focus would be improving the performance of certain devices and markets, such as Europe. He also said Smith & Nephew had a war chest capable of making acquisitions, with bolt-on deals such as last month's takeover of Ceterix Orthopaedics for up to $105 million, and larger-scale mergers and acquisitions.

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