Filed by Smith & Nephew Group plc pursuant to Rule 425
under the Securities Act of 1933
Subject Company: Centerpulse Ltd.
(Commission File No.: 001-14654)
On April 25, 2003, the following document was released to employees of Smith &
Nephew and Centerpulse.
Group Integration Update
The e-news update for global employees of Smith & Nephew and Centerpulse
Issue 3 2003
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FORMAL PROCESS OF COMBINING THE TWO BUSINESSES SET TO BEGIN
Smith & Nephew and Centerpulse have jointly announced that documents are being
sent to respective shareholders regarding the proposed combination which
indicates that the formal offer period during which Smith & Nephew shareholders
vote and Centerpulse shareholders can accept the proposed combination is about
to get underway.
Also outlined in the public announcement is the preliminary timetable for
key events related to the legal offer by Smith & Nephew for Centerpulse. In this
issue of Group Integration Update, we set out that preliminary timetable and
have also attempted to describe for you what is occurring at each of these
points in time.
.. 25 April 2003 - Offers launched for Centerpulse AG and InCentive Capital AG
Shareholders begin receiving the official documents related to the Smith &
Nephew Offer for Centerpulse and the additional offer for InCentive Capital,
which own 18.9% of Centerpulse. On the same day, summaries of the Swiss offer
documents will appear in Swiss newspapers. The clock officially starts ticking
for the offer period on this day.
.. 19 May 2003 - Smith & Nephew Extraordinary General Meeting (EGM) and Court
Meeting
This is the Smith & Nephew meeting where Smith & Nephew shareholders will be
asked to approve the transaction. Shareholders will also be asked to vote for
the creation of the new holding company, Smith & Nephew Group plc.
.. 24 June 2003 - Offers expected to close
The period during which both Centerpulse and InCentive shareholders can make up
their minds whether or not to tender (submit) their shares will end on this
date. Seventy-five percent of the Centerpulse shareholders, including the 18.9%
owned by InCentive Capital, must accept the Smith & Nephew offer for the
transaction to be successful.
If this and other conditions are met by this date - which we expect - then
this will be the date on which we know that the combination has been successful
and that we will be merging the two companies (after the remaining formalities
on the right).
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.. 25 June 2003 - The new Smith & Nephew Group shares will begin trading on the
London Stock Exchange and, in ADS form, on the New York Stock Exchange.
Once the formation of Smith & Nephew Group plc is approved and the transaction
approved by our shareholders, Smith & Nephew plc will no longer be the company
listed on the stock exchanges. The quoted company will be Smith & Nephew Group
plc.
.. 17 July 2003 - After the offer is closed on 24 June, we have to allow an
additional period for Centerpulse shareholders to accept the offer. The results
of the total number of shares tendered, or collected, will be published on this
date.
.. 25 July 2003 - The date on which payments begin to be made to the Centerpulse
shareholders, and we begin operation as one Group, as shareholders will now be
one body of owners in Smith & Nephew Group plc. Shortly after this, dealings
will begin in Smith & Nephew Group shares on the SWX Swiss Stock Exchange in
Zurich.
Orthopaedics integration update
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Planning for the integration process is well underway for the Orthopaedics
Divisions of Smith & Nephew and Centerpulse. An overall Orthopaedics Integration
Committee, led by Dave Illingworth, President of Smith & Nephew's Orthopaedics
Division, will guide the divisional efforts while a full-time Integration Office
consisting of dedicated Smith & Nephew and Centerpulse employees will manage and
coordinate the planning effort.
Two additional groups of teams -- Value Capture Teams and Day One Teams --
have begun to be formed and will be accountable to the Orthopaedics Integration
Committee. These two groups of teams will be managed by an Orthopaedics
Integration Office, and the kick off meeting for the planning work was held in
Memphis, Tenn., USA, this week. The Value Capture Teams will develop detailed
plans to realise the merger aspirations as well as gain the participation and
agreement of the managers ultimately responsible for implementing the plans. The
Day One Teams will ensure that two Orthopaedics divisions are ready to operate
as one when the transaction is completed. Leadership from both organisations are
involved in these efforts.
External communication
In some parts of the world, the press and financial markets interest in the
combination of our two businesses is greater than in others -- especially in
Switzerland and London where the markets are very familiar with both of our
companies. With any business combination, there are always external spectators
who are asked to comment on how, from their outside perspective, the process is
going and speculate on what if this or that happens. You should expect to see
this over the next couple of months.
You should also expect to hear a variety of rumours. We'll keep you
informed of what is actually happening through this publication, but we won't be
able to comment to employees on rumours. Our policy is only to comment to the
markets and the press on matters of fact, and if we respond to employees on
rumours during this process, then we are required to also respond to the broader
stakeholder groups. We'll continue to keep you informed through this publication
and if there are questions that you feel you feel you need to understand better,
please contact your manager or one of the individuals below. We will respond to
you as quickly as possible.
What's the competition saying
An investment analyst with Lehman Brothers in the US asked Stryker CEO John
Brown (currently the No 2 Orthopaedics company) last week his thoughts on the
combination of Smith & Nephew and Centerpulse. Here's how he responded in part
on the conference call, as published by the Fair Disclosure Financial Network on
16 April:
"Well, the first conclusion one has to reach is that there is now one more party
for the race as to who is going to be the largest orthopaedics company. There
were two (DePuy and Stryker) and now there is a third entity (the combined Smith
& Nephew and Centerpulse) that is going to be in that race. So in that sense, I
think the competition will heat up. Whether there are specific opportunities for
us to take the business away from the new entity, you'll just have to see. That
will all depend on how well they execute. Those are smart guys. They're going to
do their best to keep their business."
Group Integration Office Communications Representatives:
If you have a question or comment about material in this publication please
email the following representative at your individual company.
Smith & Nephew
Kathryn Austin at kathryn.austin@smith-nephew.com
Centerpulse
Chris Larson at chris.larson@centerpulse.com
Upcoming dates:
April 29: Smith & Nephew Annual General Meeting (AGM)
April 30: Centerpulse Annual General Meeting (AGM)
May 6: Group Integration Committee (GIC) meeting in Zurich
Additional Information
Any offer in the United States will only be made through a prospectus, which is
part of a registration statement to be filed with the SEC. Centerpulse
shareholders who are US persons or are located in the United States are urged to
carefully review the registration statement and the prospectus included therein,
the Schedule TO and other documents relating to the offer that will be filed by
Smith & Nephew with the SEC because these documents contain important
information relating to the Centerpulse Offer. You are also urged to read the
related solicitation/recommendation statement on Schedule 14D-9 that will be
filed with the SEC by Centerpulse relating to the Centerpulse Offer. You may
obtain a free copy of these documents after they have been filed with the SEC,
and other documents filed by Smith & Nephew and Centerpulse with the SEC, at the
SEC's Web site at www.sec.gov. Once the registration statement, as well as any
documents incorporated by reference therein, the Schedule TO and the Schedule
14D-9 have been filed with the SEC, you will also be able to inspect and copy
these documents at the public reference room maintained by the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference room. YOU SHOULD READ THE
PROSPECTUS AND THE SCHEDULE 14D-9 CAREFULLY BEFORE MAKING A DECISION CONCERNING
THE CENTERPULSE OFFER.