Merger Update

Smith & Nephew Plc
30 January 2001

30 January 2001


         Joint venture with Beiersdorf receives competition clearance

Smith & Nephew plc and Beiersdorf AG today welcomed the clearance by the
Commission of the European Communities of their agreement to create a joint
venture medical products company with sales of around £300m, and undertook to
implement the Commission's requirement to divest a number of businesses in
Europe with sales of around £8m.

In November 2000, the two companies announced their agreement to create a
global joint venture to combine their traditional woundcare, casting,
bandaging and phlebology businesses, subject to competition clearances.
Today's announcement completes the clearance process throughout the world. The
joint venture, which is to be called BSN Medical, will commence operations
worldwide on 1 April.

The joint venture will be a leading global provider of professional medical
products to hospitals and healthcare organisations. It will have manufacturing
facilities in a number of countries, and employ some 3,000 people.

The joint venture will be 50% owned by each parent company, and profits will
be shared equally between Smith & Nephew and Beiersdorf.

The necessary clearances have also been received from the competition
authorities for the acquisition by Smith & Nephew of Beiersdorf's advanced
woundcare business. The acquisition will also take effect on 1 April.

Chris O'Donnell, Chief Executive of Smith & Nephew, said today: 'We welcome
today's announcement as being a satisfactory solution which allows BSN Medical
to achieve the original expectations of its parents. We have high expectations
for this new company, which will be a global leader specialising in the more
traditional products, thus enabling Smith & Nephew to focus on its core
businesses of higher growth, advanced medical devices.'

Rolf Kunisch, Chief Executive of Beiersdorf, said: ' BSN Medical is of real
strategic value with two strong European partners coming together to create
another global company, while allowing Beiersdorf to focus on its strength -
branded consumer products like Nivea, Eucerin and Elastoplast.'

Enquiries:

Margaret Stewart, Group Director, Corporate Affairs  Tel: [phone]
Smith & Nephew plc                                   Fax: [phone]

Henning Meyer                                        Tel: [phone]

Beiersdorf AG

David Yates                                          Tel: [phone]
Financial Dynamics                                   Fax: [phone]