Disposal

Smith & Nephew Plc
28 March 2002

27 March 2002

Smith & Nephew disposes of Rehabilitation business

Smith & Nephew, the global advanced medical devices company, today announces it
has disposed of its Rehabilitation business to AbilityOne, a portfolio company
of One Equity Partners, for £87m ($123m).  £71m ($101m) has today been paid in
cash and a 21.5% interest will be retained in the enlarged business.  The
transaction is unconditional, Hart-Scott-Rodino anti-trust clearance having
already been received in the US.

AbilityOne, which does business as SammonsPreston, is majority owned by One
Equity Partners, the private equity business of Bank One Corporation.
AbilityOne is a leading supplier in the US of rehabilitation products to
hospitals, nursing homes and clinics.  The Smith & Nephew Rehabilitation
business will join AbilityOne and, combined, the business will become market
leader in these sectors in the US and have strong positions in the UK and
France.  It will be headquartered in Bolingbrook, Illinois, with principal
operations in Bolingbrook; Germantown, Wisconsin; Kirkby, UK and Tournes,
France.

The Smith & Nephew Rehabilitation business had sales of £75m, operating profits
of £10.5m and net operating assets of £22m in 2001.  On a pro forma basis the
enlarged business would have had operating profits in 2001 of £18m and net
operating assets of £34m before debt of £85m.

Cash proceeds from the transaction will be used by Smith & Nephew to reduce bank
borrowings.  The transaction will result in an exceptional gain of £18m.  Smith
& Nephew's 21.5% stake in the combined business will be equity accounted, and
the transaction will involve a dilution of 3% in reported earnings per share in
2002.

Chris O'Donnell, Chief Executive of Smith & Nephew, said: 'We believe it is
important for Smith & Nephew to retain its focus on higher technology advanced
medical devices and do not wish to lead a general consolidation of the
rehabilitation industry that we expect to take place.

'Whilst we have chosen not to invest more deeply in the rehabilitation business,
we believe that substantial value can be created by the enlarged AbilityOne and
will retain a 21.5% interest in it.  The combined business will be a market
leader, able to offer a strong portfolio of products and considerable
distribution strength.'

Enquiries:


Chris O'Donnell, Chief Executive                       Tel: [phone]
Smith & Nephew plc

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

David Yates                                            Tel: [phone]
Financial Dynamics



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