British technology company Smiths Group has agreed to divest its medical division to US-based ICU Medical for around $2.35bn.

The move nullifies an existing proposal of selling Smiths Medical to Trulli Bidco, a wholly-owned subsidiary of funds advised by TA Associates.

In a statement, Smiths Group said that its board withdrew the recommendation for the TA Transaction following a ‘superior’ offer from ICU Medical.

The latest deal is expected to deliver an additional $400m in value to shareholders and includes a $100m earnout among others.

Smiths CEO Paul Keel said: “Delivering on our commitment to maximise value, the ICU transaction provides both a higher value for Smiths’ shareholders, as well as further value creation through our 10% holding of the enlarged combined group and a potential $100m additional contingent consideration.

“We are focused on concluding this superior transaction and on driving Smiths Group forward, delivering on our significant potential as a leading industrial technology group united by shared purpose, business characteristics and a common operating model.”

Under the terms of the agreement with ICU Medical, Smiths will receive $1.85bn in cash for its medical division at closing. The British firm will also receive 2.5 million newly issued shares of ICU Medical common stock currently valued at $500m.

ICU Medical will also assume certain liabilities, which are agreed in the deal.

The transaction is expected to complete in the first half of next year. The closing is subject to fulfilment of certain conditions, including regulatory approvals and green light by Smiths’ shareholders.

Smiths Medical manufactures syringe and ambulatory infusion devices, vascular access and vital care products.

The deal is expected to create a leading infusion therapy company with pro forma combined revenues of around $2.5bn.