Doc re. Class 1 Circular

Smiths Group PLC
16 May 2007

16 May 2007


Return of cash - posting of circular

Smiths Group plc ('Smiths' or the 'Company') announces that it is posting a
circular to its shareholders and convening an Extraordinary General Meeting, to
be held on 11 June 2007, to obtain shareholder approval for the proposed return
of £2.1 billion of cash to shareholders.

On 15 January 2007 the Company announced that it had signed an agreement for the
sale of Smiths Aerospace to GE Aviation UK for a total cash consideration of
US$4.8 billion and that, following completion of the sale, it proposed to return
£2.1 billion to shareholders. On 4 May 2007, the Company announced the
completion of the sale of Smiths Aerospace to GE Aviation UK. Smiths received in
total approximately US$5.1 billion on completion, the excess over US$4.8 billion
representing the net indebtedness owing by Smiths Aerospace at completion and
the net effect of certain adjustments to the consideration under the terms of
the sale agreement.

The return is being made using a B share scheme which gives certain UK tax
resident shareholders a choice between receiving the cash in the form of income
or capital and, so far as possible, gives those who choose capital a choice as
to when the return is made. The return will be accompanied by a share
consolidation to maintain comparability of earnings per share and other company
data. Further details are set out below.

Highlights of the return of cash:
          
     •    Shareholders to receive 365 pence per existing ordinary share.

     •    Return to be implemented by way of a B share issue which provides UK 
          tax resident shareholders with flexibility to elect to receive cash in 
          the form of income or capital or a combination of the two.

     •    2 for 3 share consolidation to seek to maintain comparability of share
          price, earnings per share and dividends per share.

     •    Extraordinary General Meeting to approve the proposed return of cash
          on 11 June 2007.

     •    Cheques expected to be dispatched to shareholders and CREST accounts
          credited on 28 June 2007.

Details of the return of cash:

Subject to shareholder approval and listing of both the B shares and the new
ordinary shares arising on the share consolidation, shareholders will receive
one B share for every existing ordinary share that they hold on 15 June 2007.
Shareholders (other than those in the United States, Canada, Australia and New
Zealand) will be able to elect between the following choices in respect of those
B shares:
          
     •    To receive a single dividend of 365 pence per B share for some or all
          of their B shares. B shares in respect of which a shareholder has 
          chosen to receive this single dividend payment will automatically be 
          converted into deferred shares, which will have negligible value.

     •    To accept an offer by JPMorgan Cazenove Limited ('JPMorgan Cazenove')
          to sell some or all of their B shares to JPMorgan Cazenove (acting as 
          principal) for 365 pence per B share, free of all dealing expenses and 
          commissions, on 25 June 2007 (or such later date as the directors of 
          the Company may decide). Further details of this offer are contained 
          within the circular.

     •    To retain some or all of their B shares. It is currently expected that
          JPMorgan Cazenove, acting as principal, will make a final purchase 
          offer to acquire any retained B shares for 365 pence per B share, free 
          of all dealing expenses and commissions, on or around 17 April 2008, 
          although there can be no guarantee that such an offer will be made.

The B shares will be admitted to trading on the London Stock Exchange's main
market for listed securities and admitted to the Official List of the UK Listing
Authority and those which are retained will pay a dividend fixed at 75 per cent.
of 12 month LIBOR per annum on 365 pence per B share. Shareholders who do not
elect, or who are not eligible to elect, for any of the B share alternatives
will receive the single dividend of 365 pence per B share on all of their B
shares.

A share consolidation will be undertaken in conjunction with the return of cash.
Existing ordinary shares will be subdivided and consolidated so that
shareholders receive 2 new ordinary shares for every 3 existing ordinary shares
held on 15 June 2007. The intention is that, subject to market movements, the
share price of one new ordinary share immediately after listing should be
approximately equal to the share price of one existing ordinary share
immediately beforehand. The effect of the share consolidation will be to reduce
the number of issued ordinary shares to reflect the return of 365 pence per
ordinary share, but shareholders will own the same proportion of Smiths issued
share capital immediately following the consolidation as they did previously
(subject to fractional entitlements). The ratio used for the share consolidation
has been set by reference to Smiths market capitalisation at close of business
on 14 May 2007.

New ordinary shares will be traded on the London Stock Exchange in the same way
as existing ordinary shares and will be equivalent to the existing ordinary
shares in all material respects, including their dividend, voting and other
rights.

Full details of the return of cash and share consolidation are contained in the
circular.

Expected timetable of principal events

Latest time and date for receipt of forms of 
proxy for EGM                                            10.00 am on 9 June 2007
EGM                                                     10.00 am on 11 June 2007
Record date for issue of B shares and 
share consolidation                                      5.00 pm on 15 June 2007
Commencement of dealings in new ordinary shares          8.00 am on 18 June 2007
Latest time for receipt of election forms for 
the B share choices                                      3.00 pm on 21 June 2007
Single B share dividend declared and JPMorgan 
Cazenove makes initial purchase offer                               25 June 2007
Cheques dispatched and CREST accounts credited                      28 June 2007


For further information:

Smiths                                                        020 8458 3232
Investors     Russell Plumley
Media         Chris Fox

JPMorgan Cazenove                                             020 7588 2828
Edmund Byers
Matthew Lawrence

Credit Suisse Securities (Europe) Limited                     020 7888 8888
James Leigh-Pemberton
Alex Phillips

Two copies of each of the documents listed below have been submitted to The
Financial Services Authority and will be available for inspection at the
Document Viewing Facility which is situated at:

The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

Documents submitted:

Circular relating to the proposed return of cash to shareholders

Form of proxy

Election form for use by shareholders in respect of the initial repurchase offer
and/or retention of B shares in relation to proposed return of cash to
shareholders

JPMorgan Cazenove Limited is regulated in the United Kingdom for the conduct of
investment business by the Financial Services Authority and is acting
exclusively for Smiths and no-one else in connection with the return of cash and
will not be responsible to anyone other than Smiths for providing the
protections afforded to clients of JPMorgan Cazenove Limited nor for giving
advice in relation to the return of cash.

Credit Suisse Securities (Europe) Limited ('Credit Suisse'), which is authorised
and regulated in the United Kingdom by the Financial Services Authority, is
acting for Smiths and no one else in connection with the matters referred to in
this announcement and will not be responsible to any person other than Smiths
for providing the protections afforded to clients of Credit Suisse, or for
providing advice in relation to these matters.

Shareholders in the United States, Canada, Australia and New Zealand will
automatically receive the single B share dividend and the other alternatives are
not being and will not be offered to shareholders in those jurisdictions.



                      This information is provided by RNS
            The company news service from the London Stock Exchange