Offer for Centerpulse

Smith & Nephew Plc
20 March 2003

Not for release, publication or distribution in, into or from Canada, Australia
or Japan


20 MARCH 2003                                         FOR IMMEDIATE RELEASE


PART ONE OF TWO



    SMITH & NEPHEW AND CENTERPULSE COMBINE TO FORM GLOBAL ORTHOPAEDICS LEADER

        £1.5 BILLION RECOMMENDED OFFER BY SMITH & NEPHEW FOR CENTERPULSE

London/Zurich, 20 March 2003 - The Boards of Smith & Nephew plc and Centerpulse
AG announce that they have agreed to combine their businesses to create a
leading global orthopaedics company.


The Transaction will be effected by Smith & Nephew Group plc (which will be the
new holding company of Smith & Nephew) making a recommended offer for
Centerpulse and, in parallel, a recommended offer for InCentive Capital AG, a
listed investment company which holds, or has the right to hold, 19% of the
issued share capital of Centerpulse.



Smith & Nephew Group will offer 25.15 New Smith & Nephew Group Shares and CHF
73.42 in cash in respect of each Centerpulse Share, valuing each Centerpulse
Share at CHF 282.  The offers for Centerpulse and InCentive will together result
in the issue of 298 million New Smith & Nephew Group Shares and the payment of a
net £400 million (CHF 870 million) in cash, after taking account of InCentive's
expected cash balances.  On this basis, the Combined Group will have a pro forma
market capitalisation of £4.7 billion.



Shareholders of both companies will benefit from the expected cost and revenue
synergies arising from greater scale, and the opportunity to enhance the
Combined Group's performance over the medium and long term.  The Transaction
transforms the scale of the Combined Group's orthopaedics business and in
particular will:



•               Give the Combined Group the No 3 global position (up from No 7
and No 8 for Smith & Nephew and Centerpulse respectively) in the $14 billion
orthopaedics market, one of the fastest growing medical technology sectors,
which grew at an estimated 15% in 2002.  The Combined Group will derive
approximately 74% of sales from the orthopaedics sector (joint implants, trauma,
arthroscopy, spine and dental implants)



•               Strongly position the Combined Group in reconstructive implants
as the market leader in Europe with approximately a 26% market share.  With 18%
of the global reconstructive implant market, the Combined Group will have the No
3 position worldwide in hips and No 4 in knees



•               Enhance earnings per share of the Combined Group by mid single
digits in 2004 (before amortisation of goodwill and exceptional integration
costs) and approaching double digits in 2005 when the post-tax return on
investment is expected to meet Smith & Nephew's weighted average cost of capital



•               Generate significant long-term value through the combined
product base, customer network and scale-related benefits.  More immediately,
integration cost savings are expected to amount to £45 million per annum by
2005, requiring exceptional cash costs of £130 million to implement



•               Position the Combined Group to target a pre-goodwill operating
margin of 23% by 2005/6, up from Smith & Nephew's previous guidance of 21%.  The
Combined Group's Orthopaedics Division is targeting pre-goodwill operating
margin improvement to 27% by that time



•               Bring together the complementary product ranges and develop more
rapidly the technological capabilities of the two businesses.  The Combined
Group will possess one of the most innovative product line-ups in the global
orthopaedics sector



•               Build on the geographical strengths of each business:
Centerpulse's leading market presence in Europe complements Smith & Nephew's
position as the fastest growing orthopaedic implant company, having particularly
strong growth in the US



•               Provide an enhanced platform for growth in the spine market, the
fastest growing segment of the orthopaedics sector, as well as bring a strong
dental implant business



•               Bring longer term scale benefits in terms of research and
development and access to key orthopaedic surgeon opinion leaders



Summary of the Transaction



•               Smith & Nephew Shareholders will exchange their Smith & Nephew
Shares for shares in a new holding company, Smith & Nephew Group, on a
one-for-one basis by means of a Court Scheme.  Smith & Nephew Group will be the
holding company of the Combined Group



•               The share and cash offers for Centerpulse and InCentive will be
made by Smith & Nephew Group.  It will offer 25.15 New Smith & Nephew Group
Shares and CHF 73.42 in respect of each Centerpulse Share so that Centerpulse
and InCentive shareholders will collectively own 24% of the Combined Group.
Centerpulse and InCentive shareholders (the latter in respect of InCentive's
holding in Centerpulse) will also be offered a Collective Mix and Match Facility
whereby they may elect to receive more or less cash to the extent that other
Centerpulse or InCentive shareholders have elected to receive more or fewer New
Smith & Nephew Group Shares




•               On the basis of Smith & Nephew's closing price of 381.25p on 19
March 2003, the Centerpulse Offer values each Centerpulse Share at CHF 282 and
the total issued share capital of Centerpulse at CHF 3.3 billion (£1.5 billion).
  The Centerpulse and InCentive Offers will together result in the issue of 298
million New Smith & Nephew Group Shares and a net payment of CHF 870 million
(£400 million) in cash, after taking account of InCentive's expected cash
balances



•               The Centerpulse Offer, together with assumed debt, represents a
multiple of 12.6 times Centerpulse's continuing EBITDA before exceptional items
for the year ended 31 December 2002, the results of which are being released
today.  In these results Centerpulse reports sales of CHF 1,241 million and
operating profit before goodwill amortisation and exceptional items of CHF 228
million for continuing operations



•               Smith & Nephew Group will assume Centerpulse's outstanding net
debt which stood at CHF 358 million (£165 million) as at 31 December 2002.
Smith & Nephew Group has entered into a new underwritten bank debt facility of
$2.1 billion, inter alia to refinance the existing net debt of both Smith &
Nephew and Centerpulse, to finance the cash element of the Offers and to provide
working capital headroom



•               Shareholders representing 77% of InCentive's issued share
capital have undertaken irrevocably to accept the InCentive Offer.  Furthermore,
Smith & Nephew has been granted a right of first refusal over their shares in
the event of a third party making a higher offer for Centerpulse and the third
party offer becoming unconditional as to acceptances.  InCentive's portfolio is
currently being rationalised so as eventually to comprise only Centerpulse
shares and cash, and the terms of the InCentive Offer will be such that in
respect of its holding in Centerpulse they will precisely reflect the terms of
the Centerpulse Offer



•               The primary listing of the Combined Group will be in London.
Smith & Nephew Group will seek a secondary listing of its shares on the SWX
Swiss Exchange as of the Settlement Date or as soon thereafter as is
practicable.  Smith & Nephew Group intends to replicate Smith & Nephew's current
ADS listing in the United States



•              The Centerpulse Offer has been unanimously recommended by the
Board of Centerpulse.  The Centerpulse Offer is conditional, inter alia on the
approval of Smith & Nephew's shareholders, on regulatory clearances and on the
Court Scheme having become effective



•              The InCentive Offer has been unanimously recommended by the Board
of InCentive and is conditional, inter alia, on the Centerpulse Offer having
been declared wholly unconditional and on the Court Scheme having become
effective



•              The Transaction is expected to be completed towards the middle of
2003



•              Smith & Nephew is being advised by Lazard.  Centerpulse is being
advised by Lehman Brothers and UBS Warburg.  InCentive is being advised by
Lombard Odier Darier Hentsch & Cie




Commenting on today's announcement, Chris O'Donnell, Chief Executive of Smith &
Nephew, said:



'This transaction is an important strategic step for both companies.  It brings
together two highly complementary businesses, transforming the scale of both of
our orthopaedics businesses, as well as providing an enhanced position in the
rapidly growing spine segment.  The common technology focus and excellent
product and geographic fit between the two businesses will be a strong platform
for value creation.



'Given the cultural similarities of our two organisations, we are confident we
can achieve a smooth and rapid integration of the two businesses.  We expect the
resulting combination to deliver significant synergies and returns for
shareholders, and the quality and breadth of the combined product range will
enable us to serve better the needs of patients, surgeons and hospitals.'



Dr. Max Link, Chairman and Chief Executive of Centerpulse, added:



'We are delighted to be creating, with Smith & Nephew, one of the world's
leading orthopaedics companies which will have increased strength and the
resources to prosper as a global player in its sector.  We believe that a
combination with Smith & Nephew represents an attractive opportunity for
shareholders and strongly recommend Centerpulse shareholders to accept the
offer.'



This summary should be read in conjunction with the full text of the following
announcement.  Appendix I contains the conditions to the Centerpulse Offer.
Appendix II contains the conditions to the InCentive Offer.  Appendix III
contains the definitions of terms used in this announcement.



Exchange rates of CHF 2.1756: £1 and CHF 1.3915 : US$1 have been used throughout
this announcement.



There will be a meeting for analysts at 9.30 am GMT in London today at City
Presentation Centre, 4 Chiswell Street, Finsbury Square, London, UK, followed by
a teleconference for US analysts and shareholders at 3.30 pm GMT/10.30 am EST. A
press conference will be held at City Presentation Centre this morning at 11.30
am GMT.  Please call Mo Noonan at Financial Dynamics on  [phone]
for details.



The analyst meeting will be webcast as will the tele-conference today at 3.30 pm
GMT on www.smith-nephew.com/investors and on www.centerpulse.com/centerpulse/
investors/   High resolution photographs are available to the media free of
charge at www.newscast.co.uk



On Friday 21 March 2003, there will also be a meeting for Swiss analysts and
shareholders at 10.00 am GMT/11.00 am CET at Swissotel, Zurich-Oerlikon,
Switzerland.  Please contact Suha Demokan at Centerpulse on [phone]
for details.


ENQUIRIES:


Smith & Nephew                                        Tel:  [phone]
Chris O'Donnell, Chief Executive
Peter Hooley, Finance Director
Angie Craig, Corporate Affairs Director


Centerpulse
Max Link, Chairman and Chief Executive
Urs Kamber, Chief Financial Officer
Beatrice Tschanz, Corporate Communications            Tel:  [phone]
Suha Demokan, Investor Relations                      Tel:  [phone]

InCentive                                             Tel:  [phone]
Rene Braginsky, CEO & Delegate of the Board
Raoul Bloch

Lazard                                                Tel:  [phone]
(Financial Advisers to Smith & Nephew)
Nicholas Shott

Cazenove                                              Tel:  [phone]
(Brokers to Smith & Nephew)
Duncan Hunter
Tony Brampton

Dresdner Kleinwort Wasserstein                        Tel:  [phone]
(Brokers to Smith & Nephew)
Jim Hamilton
Angus Kerr

Lehman Brothers
(Financial Advisers to Centerpulse)
Kenneth Siegel                                        Tel:  [phone]
Henry Phillips                                        Tel:  [phone]
Joseph Kohls                                          Tel:  [phone]

UBS Warburg
(Financial Advisers to Centerpulse)
Karl Schmidt                                          Tel:  [phone]
Liam Beere                                            Tel:  [phone]

Lombard Odier Darier Hentsch & Cie
(Financial Advisers to InCentive)
Romeo Cerutti                                         Tel:  [phone]
Marc Klingelfuss                                      Tel:  [phone]

Financial Dynamics
(PR for Smith & Nephew)
London:  David Yates / Jonathan Birt                  Tel:  [phone]
New York:  Anton Nicholas / Deborah Ardern-Jones      Tel:  [phone]




Lazard is acting for Smith & Nephew in connection with the Transaction and
no-one else and will not be responsible to anyone other than Smith & Nephew for
providing the protections offered to clients of Lazard nor for providing advice
in relation to the Transaction.



Lehman Brothers is acting for Centerpulse in connection with the Transaction and
no-one else and will not be responsible to anyone other than Centerpulse for
providing the protections offered to clients of Lehman Brothers nor for
providing advice in relation to the Transaction.



UBS Warburg is acting for Centerpulse in connection with the Transaction and
no-one else and will not be responsible to anyone other than Centerpulse for
providing the protections offered to clients of UBS Warburg nor for providing
advice in relation to the Transaction.



Lombard Odier Darier Hentsch & Cie is acting as financial adviser for InCentive
in connection with the Transaction and no-one else and will not be responsible
to anyone other than InCentive for providing the protections offered to clients
of Lombard Odier Darier Hentsch & Cie nor for providing advice in relation to
the Transaction.  In addition, Smith & Nephew has entrusted Lombard Odier Darier
Hentsch & Cie with the technical execution of the InCentive Offer.



No offer or invitation to acquire or exchange securities in Centerpulse or
InCentive is being made now.  Any such offer or invitation will only be made in
documents to be published in due course and any such acquisition or exchange
should be made solely on the basis of information contained in such documents.



The Centerpulse Offer will not be made, directly or indirectly, in or into, or
by use of the mails or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, Canada, Australia
or Japan.  Accordingly, copies of this document and any related documents are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from, Canada, Australia or Japan
and persons receiving this document and any related documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from, Canada, Australia or Japan.



Relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada; no prospectus has
been lodged with, or registered by, the Australian Securities and Investments
Commission or the Japanese Ministry of Finance; and the New Smith & Nephew Group
Shares have not been, nor will they be, registered under or offered in
compliance with applicable securities laws of any state, province, territory or
jurisdiction of Canada, Australia or Japan.  Accordingly, the New Smith & Nephew
Group Shares may not (unless an exemption under relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or indirectly in or
into Canada, Australia or Japan or any other jurisdiction as to do so may
constitute a violation of the relevant laws of, or require registration thereof
in such jurisdiction or to, or for the account or benefit of, a person in or
resident in Canada, Australia or Japan.



The InCentive Offer is not being made in any country where such offer would be
considered illegal or would otherwise violate any applicable law or regulation
or where Smith & Nephew may be obliged to change the terms of the InCentive
Offer, to file an additional application with any authorities or other
institutions or to undertake additional measures in relation to the InCentive
Offer.  It is not foreseen to extend the InCentive Offer to such jurisdictions.
Documents in relation to this transaction must not be distributed in such
jurisdictions or sent to such jurisdictions.  Persons in such jurisdictions must
not use these documents for marketing purposes for sales of shares of InCentive.




Forward-Looking Statements



This press release contains forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1998.  Statements that
are not strictly historical statements, including statements about Smith &
Nephew's and Centerpulse's beliefs and expectations, constitute forward-looking
statements.  By their nature, forward-looking statements are subject to risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future.  The forward-looking statements in this release include,
but are not limited to, statements addressing the following subjects:  expected
timing of the Transaction; future financial and operating results; actions to be
taken by the Combined Group following the Transaction; and the timing and
benefits, including synergy benefits, of the Transaction.  The following
factors, among others, could cause results to differ materially from those
described in the forward-looking statements:  inability to obtain, or meet the
conditions imposed for, regulatory approvals for the Transaction; the failure of
the shareholders of Smith & Nephew to pass the resolutions necessary to
implement the Transaction; the failure of the court to sanction the Court
Scheme; the failure of the minimum tender condition or the failure of other
conditions to the Offer; the risk that the businesses will not be integrated
successfully and that the expected synergies and cost savings will not be
achieved; and other economic, business, competitive and/or regulatory factors
affecting the businesses of Smith & Nephew and Centerpulse generally.  More
detailed information about such economic, business, competitive and/or
regulatory factors is set forth in Centerpulse's filings with the SEC.  Smith &
Nephew and Centerpulse are under no obligation, and expressly disclaim any
obligation, to update or alter their forward-looking statements, whether as a
result of new information, future events or otherwise.



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.


Not for release, publication or distribution in, into or from Canada, Australia
                                    or Japan




20 MARCH 2003                                              FOR IMMEDIATE RELEASE



PART TWO OF TWO


   SMITH & NEPHEW AND CENTERPULSE COMBINE TO FORM GLOBAL ORTHOPAEDICS LEADER



Introduction



The Boards of Smith & Nephew and Centerpulse announce that they have agreed to
combine their businesses to create a leading global orthopaedics company.



The proposed Transaction brings significant strategic benefits, transforming the
scale of the Combined Group's reconstructive implant business, expanding its
geographic reach and broadening its product offering.  Additionally, it offers
an enhanced platform for growth in spinal implants, the fastest growing segment
within the orthopaedics sector.  The Transaction is expected to result in
significant value creation opportunities for shareholders and to serve better
the current and future needs of patients, surgeons and the hospital communities.



Information on Smith & Nephew



Smith & Nephew is a global advanced medical devices company employing over 7,300
people with operations in 32 countries.  Underlying sales growth in 2002 was
14%, with acquisitions adding a further 4%. Operating margins of continuing
operations (before amortisation of goodwill and exceptional items) were 18%.  It
is structured in three divisions, Orthopaedics, Endoscopy and Advanced Wound
Management, with principal manufacturing in Tennessee and Massachusetts in the
US, and Hull in the UK.



Orthopaedics is a global provider of reconstructive implant systems for knees,
hips and shoulder joints, as well as trauma and clinical therapy products to
help repair broken bones and damaged joints.  This business strives to combine
industry-leading technology with clinically proven products to deliver simpler,
less invasive and more cost effective procedures to the orthopaedic community.
Smith & Nephew has 8% of the orthopaedic reconstructive implant and trauma
markets and holds the No 6 worldwide position.  In 2002, sales were £470
million, an underlying sales increase of 20%, and EBITA before exceptional items
was £98 million.



Endoscopy is a world leader in the development and commercialisation of
minimally invasive endoscopic surgery.  This business is committed to reducing
trauma and pain to the patient, reducing cost to healthcare systems, and
providing better outcomes for surgeons and patients with its broad range of
techniques and instruments for minimally invasive surgery, particularly of the
joint.  Smith & Nephew has 35% of the arthroscopy (joint) market and holds the
leading worldwide position.  In 2002, sales were £292 million, an underlying
sales increase of 10%, and EBITA before exceptional items was £54 million.



Wound Management provides an advanced range of treatments for difficult to heal
wounds.  It develops innovative new solutions to chronic and acute wound
management problems.  Smith & Nephew has 21% of the advanced wound management
market and has the leading worldwide position.  In 2002, sales were £322
million, an underlying increase of 11%, and EBITA before exceptional items was
£44 million.



Smith & Nephew also has investments in BSN Medical, a joint venture with
Beiersdorf AG, and in AbilityOne Corporation, a rehabilitation business in which
it holds a 21.5% interest.  The share of operating profit before exceptional
items attributable to Smith & Nephew in 2002 from these two investments was £25
million.



Summary financial information as extracted from Smith & Nephew's audited 2002
results:


                                                                  Year to              Year to
                                                                  31 December          31 December
                                                                  2002                 2001

Group turnover (continuing operations)                            £1,084m              £978m
EBITA before exceptional items                                    £221m                £187m
(continuing operations including investments)
Basic earnings per share before goodwill amortisation and         16.02p               13.96p
exceptional items
Shareholders' funds                                               £517m                £405m
Net debt                                                          £277m                £244m



Information on Centerpulse



Centerpulse, formerly Sulzer Medica AG, is a leading medical technology group
employing over 2,800 employees globally, which serves the reconstructive joint,
spinal and dental implant markets.  Following the divestiture of its
Cardiovascular Division, which was concluded in January 2003, the group is
organised into three divisions: Orthopaedics, Spine-Tech and Dental.
Centerpulse, which is headquartered in Switzerland and has a history of
technological leadership in its principal areas of activity, has five production
facilities in Switzerland, the US and France.



The company's largest division is Orthopaedics, which focuses on joint care and
includes the traditionally strong hip and knee implant businesses.  Centerpulse
estimates that it has a leading share of the European implant market, with a 22%
market share.  In 2002, the Orthopaedics Division reported total sales of CHF
923 million, of which CHF 542 million was in Europe. The underlying sales growth
for 2002 was 14%.



Spine-Tech offers a full range of spinal implant systems primarily in the US,
and has a global market share of 7%.  In 2002, the Spine-Tech Division had sales
of CHF 179 million, an underlying growth of 10%.




The Dental Division, producing mainly dental implants, serves primarily the US
and European markets and occupies the No 4 position globally, with a market
share of approximately 12%.  In 2002, the Dental Division had sales of CHF 131
million, an underlying increase of 18%.



Summary financial information as extracted from Centerpulse's audited
consolidated 2002 results, which are being released today:


                                                                  Year to            Year to
                                                                  31 December        31 December
                                                                  2002               2001

Group turnover (continuing operations)                            CHF 1,241m         CHF 1,158m
EBITA before exceptional items                                    CHF 228m           CHF 107m
(continuing operations)
Profit/(loss) before tax                                          CHF 376m           CHF (1,645)m
Basic earnings per share                                          CHF 33.10          CHF (119.62)
Net assets                                                        CHF 1,278m         CHF 791m
Net debt (cash)                                                   CHF 358m           CHF (61)m



Information on InCentive



InCentive, an investment company listed on the SWX Swiss Exchange, holds, or has
the right to hold (after the exercise of its call options and lapse of related
put options), 19% of the issued share capital of Centerpulse.  In its full year
2002 results, which are being released today, InCentive reports profit before
tax of CHF 178 million.  As of 14 March 2003, InCentive's net asset value
amounted to CHF 739 million.  InCentive's portfolio is currently being
rationalised so as eventually to comprise only Centerpulse shares and cash.



Strategic Rationale



The combination of the two companies creates a global leader in the $14 billion
orthopaedics market, with the Combined Group rising to a No 3 market share
position.  In bringing together two complementary businesses and transforming
their scale, the Transaction offers significant strategic and value creation
opportunities.



Market Dynamics



The orthopaedic implant market continues to be one of the fastest growing
medical technology sectors, with estimated global growth of 15% in 2002.  In
most developed countries there are some common drivers:



•               Demographics of an ageing population, with the population aged
50-69 projected to increase by nearly 3% per annum for the foreseeable future



•               Improved quality of life expectations, with patients also being
better informed of the benefits of orthopaedic surgery due to the Internet,
media, and word of mouth



•               An expanding patient pool, due to an increase in active
lifestyles and new longer-lasting materials such as improved bearing surfaces in
orthopaedics and bioresorbables in arthroscopy that are encouraging surgeons to
treat younger and more active patients



•               An increasing incidence of osteoarthritis, combined with less
invasive surgery trends and continued growth in surgeon familiarity with implant
surgery



•               An increasing need for revision surgeries, as patients from the
first orthopaedic boom in the late 80s require revision procedures



Global Scale and Increased Geographic Reach in Reconstructive Implants



Building on Centerpulse's market leading position in Europe and Smith & Nephew's
significant presence in the US, the Combined Group will become the fourth
largest global reconstructive implant company with a market share of
approximately 18%.  In Europe, the Combined Group will be a market leader in
reconstructive implants with a market share of approximately 26%.  It will
become No 4 overall in reconstructive implants in the US with a market share of
14% and have an enhanced position in Japan.



Centerpulse's particular geographic strength is in Europe, based on strong
surgeon relationships developed over many years, along with an outstanding
reputation for service.  Centerpulse also has significant manufacturing and
research and development facilities, located in Winterthur, Switzerland.  This
provides a major European facility, which will continue as a key centre for the
long-term benefit of the Combined Group.



In addition, the two businesses fit together well in the US.  Centerpulse, which
has a smaller share of the US market, is particularly well-established in the
Southern states, complementing the strong presence of Smith & Nephew across
other regions of the US.



The combination will also double the scale of the Combined Group's business in
the important Japanese market, where Smith & Nephew has a strong position in
trauma and Centerpulse is well positioned in reconstructive implants.



Complementary Product Lines



The fit between the two companies' product lines is excellent.  Centerpulse is
strong in hips, with pioneering positions in metal-on-metal and highly
cross-linked polyethylene, as well as extensive developments under way in less
invasive procedures and in larger heads giving greater range of motion.  Whilst
Smith & Nephew is also strong in hips, it has particular strength in knees, with
the revolutionary Oxinium product setting new standards for innovation and
longevity.  Leveraging the specific strengths of each company's sales
relationships into new accounts with this expanded product range is anticipated
to lead to significant cross-selling opportunities.



Both companies have a strong tradition of technological innovation and, when
combined, they will possess one of the most innovative product line-ups in
global orthopaedics, including:



•        The broadest range of wear reducing joint implant bearing surfaces
(Oxinium, Durasul, Metasul)

•        Unique minimally invasive knee surgery products (Unispacer, Accuris)

•        Proven total joint brands (Genesis II, Natural Knee, CLS, Alloclassic,
Spectron, Reflection, Synergy)

•        Computer Assisted Surgery technology (Navitrack, Achieve)

•        Advanced trauma devices (TriGen, Taylor Spatial Frame, OrthoGuard AB,
Exogen)



Expansion in the Fast-Growing Spinal Segment



Centerpulse's global No 5 position in spinal implants provides the Combined
Group with an enhanced platform for growth in the fastest growing segment of the
orthopaedics market.  In 2001, the US and European spine market was estimated to
be worth $1.7 billion.  Centerpulse entered the spinal marketplace in 1998
through the acquisition of Spine-Tech Inc., which brought with it the market
leading lumbar fusion cage.  Spine-Tech now offers a full range of products in
the spinal implant market with devices for lumbar and cervical fixation,
allografts and stabilisation devices.  The spine business is well placed for
growth in a rapidly expanding market.



Dental



Centerpulse's Dental Division occupies the No 4 position globally in the dental
implant market with a market share of approximately 12%.  It primarily serves
the US market and had sales of CHF 131 million in 2002, an underlying increase
of 18%.  The global market for dental implants is currently growing at 15% per
annum and the Dental Division is well positioned for further growth.



Value Creation Opportunities



Significant value is expected to be created for the Combined Group's
shareholders in three key areas: integration cost savings, sales and marketing
opportunities and the longer term scale advantages of being a leading
orthopaedics company.



At the Group level, integration cost savings are expected to amount to £45
million per annum by 2005, requiring exceptional cash costs of £130 million to
implement.  These will enable the Combined Group to target an improvement of its
pre-goodwill operating margin to 23% by 2005/6, up from Smith & Nephew's
previous guidance of 21%, and with stronger cash generation.  This is expected
to enhance earnings per share of the Combined Group (before amortisation of
goodwill and exceptional integration costs) by mid single digits in 2004 and
approaching double digits in 2005 when the post-tax return on investment is
expected to meet Smith & Nephew Group's weighted average cost of capital.  The
Combined Group's tax rate is expected to be 29% going forward.



Opportunities to combine the organisations to present a significant force in
orthopaedics in each of the key markets of the US, Europe and Japan have been
identified.  The combination of each company's sales relationships in existing
accounts with the expanded product range is expected to lead to an increase in
sales force productivity and opportunities to launch innovative products across
an expanded sales force.  Extending proprietary technologies such as Oxinium,
Durasul and Metasul throughout the product range is expected to develop improved
demand for the Combined Group's products.  These, together with related cost
savings, will enable the Orthopaedics Division to target a pre-goodwill
operating margin of 27% by 2005/6.



Longer term, the opportunity to develop and manufacture a unified range of next
generation products will lead to further benefits.  The enhanced scale of the
Combined Group's strategic research and development will enable it to invest at
the forefront of orthopaedic product development and its increased market
presence will enable a stronger profile to be built with major customer groups.



Structure and Management



The Chairman of the Combined Group will be Dudley Eustace, its Chief Executive
will be Chris O'Donnell and the Finance Director will be Peter Hooley.  The
Combined Group will consist of five divisions - in order of sales revenue,
Orthopaedics, Wound Management, Endoscopy, Spine and Dental - and will operate
from major manufacturing and market support facilities in the UK, Switzerland
and the US.



Dr. Max Link, Chairman and Chief Executive of Centerpulse, will join the Board
of Smith & Nephew Group as a non-executive director and one of two Vice Chairmen
on completion of the Transaction.  Rene Braginsky, Centerpulse board member,
will also join the board of Smith & Nephew Group as a non-executive director.
Dr. Rolf Stomberg, a current Smith & Nephew Board member, will become a Vice
Chairman of Smith & Nephew Group.



Benefits for all Stakeholders



The Directors of both Smith & Nephew and Centerpulse believe that, in addition
to creating value for shareholders of the Combined Group, the Transaction will
deliver significant benefits for patients, surgeons, hospitals and employees:



•               Patients will benefit from the pooling of research and
development activities, resulting in better targeted and more optimised product
development which will deliver enhanced product performance



•               Surgeons and hospitals will benefit from a wider product
offering, broader infrastructure and enhanced delivery of services and solutions



•               Employees will benefit from being part of one of the world's
leading orthopaedic groups, operating in a dynamic and fast-growing industry and
with the resources and depth to compete with other market leaders in the sector



New Holding Company



Smith & Nephew Shareholders will exchange their Smith & Nephew Shares for shares
in a new holding company, Smith & Nephew Group, on a one-for-one basis by means
of a Court Scheme.  Smith & Nephew Group will be the holding company of the
Combined Group.  Smith & Nephew Group is tax resident in Switzerland, whilst
Smith & Nephew will remain tax resident in the UK.  Arrangements will be made to
maintain the local tax treatment of dividends for shareholders.



The Court Scheme will be conditional on each of the Centerpulse Offer and
InCentive Offer having become wholly unconditional, save for conditions relating
to the Court Scheme.



Details of the Centerpulse Offer



The share and cash offers for Centerpulse and InCentive will be made by Smith &
Nephew Group.  It will offer 25.15 New Smith & Nephew Group Shares and CHF 73.42
in respect of each Centerpulse Share so that Centerpulse and InCentive
shareholders will collectively own 24% of the Combined Group.  Centerpulse and
InCentive shareholders will also be offered a Collective Mix and Match Facility
whereby they may elect to receive more or less cash to the extent that other
Centerpulse or InCentive shareholders have elected to receive more or fewer New
Smith & Nephew Group Shares.  Holders of Centerpulse ADSs will be offered 0.2515
New Smith & Nephew Group's ADSs per Centerpulse ADS and CHF 7.342 in cash and
may participate in the Collective Mix and Match Facility.



On the basis of Smith & Nephew's closing share price of 381.25p on 19 March
2003, the Centerpulse Offer values each Centerpulse Share at CHF 282 and the
total issued share capital of Centerpulse at CHF 3.3 billion (£1.5 billion).
The Centerpulse and InCentive Offers will together result in the issue of 298
million New Smith & Nephew Group Shares and a net payment of CHF 870 million
(£400 million) in cash, after taking account of InCentive's expected cash
balances.



Smith & Nephew Group will assume Centerpulse's outstanding net debt which stood
at CHF 358 million (£165 million) as at 31 December 2002.  Smith & Nephew Group
has entered into a new underwritten debt facility of $2.1 billion, inter alia to
refinance the existing net debt of both Smith & Nephew and Centerpulse, to
finance the cash element of the Offers and to provide working capital headroom.



Pursuant to the Centerpulse Transaction Agreement, Smith & Nephew and
Centerpulse have agreed that one party shall make a cost reimbursement payment
of CHF 20 million to the other in certain circumstances.



The primary listing of the Combined Group will be in London.  Smith & Nephew
Group will seek a secondary listing of its shares on the SWX Swiss Exchange as
of the Settlement Date or as soon thereafter as is practicable.  Smith & Nephew
Group intends to replicate Smith & Nephew's current ADS listing in the United
States.



The Centerpulse Offer has been unanimously recommended by the Board of
Centerpulse.  The Centerpulse Offer is conditional, inter alia, on the approval
of Smith & Nephew's shareholders, on regulatory clearances and on the Court
Scheme having become effective.



Details of the InCentive Offer



InCentive's portfolio is currently being rationalised so as eventually to
comprise only Centerpulse Shares and cash.  The terms of the InCentive Offer
will be such that in respect of InCentive's holding in Centerpulse they will
precisely reflect the terms of the Centerpulse Offer.





The offer price for each InCentive Share shall be  (a+b)/c  where:


a     =     The total amount of New Smith & Nephew Group Shares and amount of cash that would be payable under
            the Centerpulse Offer for the Centerpulse Shares held by InCentive (the 'Centerpulse Holding')

b     =     The adjusted net asset value (positive or negative) of InCentive (the 'Adjusted NAV') calculated
            as at the last day of the InCentive Offer period but excluding the Centerpulse Holding and
            attributing no value to any InCentive Shares held by InCentive or its subsidiaries (the 'Treasury
            Shares'), as confirmed by InCentive's auditors

c     =     The total number of InCentive Shares in issue on the last day of the InCentive Offer period less
            the number of Treasury Shares on that date



As a result, the consideration for each InCentive Share will consist of (i) an
element of New Smith & Nephew Group Shares and cash which will mirror
InCentive's Centerpulse Holding; plus or minus (ii) the cash attributable to
Adjusted NAV of InCentive excluding the Centerpulse Holding.  If the Adjusted
NAV is negative, then the cash element attributable to the Centerpulse Holding
shall be reduced, pro rata, and if after such reduction there is still a
negative balance, the number of New Smith & Nephew Group Shares to be issued
shall be reduced by a corresponding amount.



InCentive and Centerpulse shareholders will also be offered a Collective Mix and
Match Facility whereby they may elect to receive more or less cash to the extent
that other InCentive or Centerpulse shareholders have elected to receive more or
fewer New Smith & Nephew Group Shares.



Shareholders representing 77% of InCentive's issued share capital have
undertaken irrevocably to accept the InCentive Offer.  Furthermore, Smith &
Nephew has been granted a right of first refusal over their shares in InCentive
in the event of a third party making a higher offer for Centerpulse and the
third party offer becoming unconditional as to acceptances.



Pursuant to the InCentive Transaction Agreement, Smith & Nephew and InCentive
have agreed that one party shall make a cost reimbursement payment of CHF 4
million to the other in certain circumstances.



The InCentive Offer has been unanimously recommended by the Board of InCentive
and is conditional, inter alia, on the Centerpulse Offer having been declared
wholly unconditional and the Court Scheme having become effective.



Collective Mix and Match Facility



Accepting Centerpulse Shareholders under the Centerpulse Offer and accepting
InCentive Shareholders under the InCentive Offer (the latter in respect of
InCentive's holding in Centerpulse) (together the 'Accepting Shareholders') may
elect to take fewer New Smith & Nephew Group Shares or more New Smith & Nephew
Group Shares than their basic entitlement under the relevant Offer, but
elections under both Offers (taken together) to receive more New Smith & Nephew
Group Shares (together the 'Excess Shares') will only be satisfied to the extent
that elections have been made under both Offers (taken together) by Accepting
Shareholders to receive fewer New Smith & Nephew Group Shares (together referred
to as the 'Available Shares').  The Available Shares will be allocated to the
applicants for Excess Shares in proportion to the number of Excess Shares
applied for.  If the total number of Available Shares exceeds the total number
of Excess Shares applied for, the Available Shares shall be limited to an amount
equal to the Excess Shares and vice versa.  Once the share allocations have been
determined, the cash element of the consideration will be reduced or increased
(as the case may be) for each Accepting Shareholder who has been allocated an
increased or reduced number of New Smith & Nephew Group Shares.  All
calculations shall be made by reference to the number of acceptances and
elections as of the last day of the additional acceptance period and, for the
purposes of these calculations, the value per New Smith & Nephew Group Share
shall be CHF 8.29, the same as the closing middle market price of a Smith &
Nephew share on the day immediately prior to this announcement of 381.25p.



Fractional Entitlements to Both Offers



Fractions of New Smith & Nephew Group Shares will not be allotted or issued to
accepting Centerpulse or InCentive shareholders but will be aggregated and sold
in the market and the net proceeds of sale distributed on a pro rata basis to
the Centerpulse and InCentive shareholders who accept the Offers and are
entitled to them.



Product Recall Liability



Last year the Board of Centerpulse succeeded in putting in place measures to
deal with claims arising from a major recall of reconstructive implants dating
back to 5 December 2000.  This involved Centerpulse entering into a district
court approved class action settlement for US residents on 13 March 2002, and
establishing a Settlement Trust to pay claims to class members in the US who
undergo surgery to replace an affected hip implant prior to 5 June 2003 or an
affected tibial base plate prior to 17 November 2003.  The Settlement Trust was
funded with approximately $1.1 billion, of which Centerpulse contributed $725
million in cash on 4 November 2002.  Centerpulse's insurers and former parent
company funded the balance.  The Settlement Trust funds the first 4,000 valid
claims, and Centerpulse remains liable for 50% of the cost of settled claims in
excess of that number.  The Settlement Trust also funds the first 64 settled
claims for reprocessed hip implants replaced before 8 September 2004, with
Centerpulse remaining liable in full for settled claims beyond this number.



As at 14 March 2003, the administrator of the Settlement Trust had received
4,295 claim forms in relation to hip implants and tibial base plates and 140
claim forms for reprocessed hip implants.  The administrator has determined that
for these classes of claims, 3,718 and 105 respectively are likely to be valid.
It is not known at present how many more claims will be made or whether the
remaining and future claims are valid and hence how many will qualify for
settlement.



The Board of Smith & Nephew has examined the issue in detail.  Although the
Board of Centerpulse believes that the remaining provision in its year end
audited accounts will be adequate to provide for the liabilities that may arise
from the product recall, the Board of Smith & Nephew is mindful that there is a
possibility that the eventual number of revisions and cost of settling claims
from the product recall issue may exceed the level of provision made by
Centerpulse.  The Board of Smith & Nephew has taken into account this
possibility in agreeing the terms and structure of the proposed Transaction.



Dividends



In respect of the final dividend of 3.00p per Smith & Nephew ordinary share
recommended for the year ended 31 December 2002, the existing Smith & Nephew
Shareholders will receive their entitlement in full.  The New Smith & Nephew
Group Shares being issued as consideration for Centerpulse will not rank for
this final dividend.  Centerpulse does not intend to pay a dividend in respect
of 2002.  Smith & Nephew's dividend policy remains unchanged.



Smith & Nephew 5.5% Cumulative Preference Shares



Resolutions will be put before Smith & Nephew Shareholders to enable the
company's 5.5% Cumulative Preference Shares to be repaid at a price of 138p per
share together with accrued interest.  Irrevocable commitments to support these
resolutions at a class meeting have been obtained from preference shareholders'
holding 210,313 preference shares, representing approximately 78% of outstanding
preference shares.



The Offers are not conditional on the passing of these resolutions.  However, it
is intended that these resolutions will be placed before Smith & Nephew
Shareholders, even if the Offers do not proceed.



Current Trading and Prospects for Smith & Nephew



At this early stage of the year, sales at Smith & Nephew's Orthopaedics and
Wound Management divisions have seen a solid start to 2003.  Orthopaedics' move
to two divisions - Reconstructive Implant and Trauma - is progressing well and
the introduction of specialised sales forces in the US is proceeding to plan.
Endoscopy has experienced some pressure from the increased re-use of disposable
blades in the United States.  Smith & Nephew's margin in the first half of the
year will be impacted by the assumption of the full costs of the Dermagraft
launch.  Looking to the full year, Smith & Nephew remains confident of meeting
its margin expansion and pre-goodwill earnings per share growth targets.



Current Trading and Prospects for Centerpulse



The following Outlook statement is included in Centerpulse's results for the
year ended 31 December 2002, released today:



'Trading since year end has been in line with management expectations.
Centerpulse remains confident that it will be able to grow in its core markets
at least in line with the market.  In Orthopaedics, the company believes that it
can maintain a leading role in its primary markets in Europe and generate solid
growth in the US and Japan by continuing to deliver first-class products and
building long-term trusting relationships.  The Spine-Tech Division intends to
launch several new products in the US market, with the introduction of the
Dynesys stabilization system and the radiolucent cages in 2003 expected to
positively impact sales growth.  The Dental Division has reinforced its market
position by enhancing its product offerings with innovative solutions for
aesthetics as well as leading educational programs.'

General



In accordance with Swiss takeover rules, Smith & Nephew Group is today also
issuing pre-announcements for both the Centerpulse Offer and the InCentive Offer
to inform the Swiss market of its intention to launch  the Offers.



Following today's announcements, it is expected that formal documentation will
be despatched to Smith & Nephew Shareholders, Centerpulse Shareholders and
InCentive Shareholders by mid April with the Court Scheme and the Offers
completing towards the middle of the year.  Centerpulse Shareholders and
InCentive Shareholders will receive listing particulars and an offer prospectus
and Smith & Nephew Shareholders will receive listing particulars and scheme
documentation seeking their approval of the Transaction.  The documentation will
specify the necessary actions to be taken by Smith & Nephew Shareholders,
Centerpulse Shareholders and InCentive Shareholders.  Smith & Nephew Group will
seek to file a registration statement with the SEC, which will enable
Centerpulse Shareholders residing in the United States to accept the Centerpulse
Offer.



Recommendations



The Transaction has the unanimous support and recommendation of the Boards of
Smith & Nephew, Centerpulse and InCentive.



The Smith & Nephew Directors, who have been advised by Lazard, consider the
Transaction to be in the best interests of the company and of Smith & Nephew
Shareholders as a whole.  In providing advice to the Smith & Nephew Directors,
Lazard has placed reliance on the Smith & Nephew Directors' commercial
assessment of the Transaction.  Accordingly, the Smith & Nephew Directors will
be unanimously recommending that Smith & Nephew Shareholders vote in favour of
the resolutions to be proposed at the shareholders' meeting to be convened in
relation to the Transaction, and the court convened shareholders' meeting to
approve the Court Scheme as they intend to do in respect of their own beneficial
holdings of, in aggregate, 295,618 Smith & Nephew Shares and 21,331 Smith &
Nephew ADSs, representing approximately 0.055 per cent of the current issued
ordinary share capital of Smith & Nephew.



The Board of Centerpulse considers the terms of the Centerpulse Offer to be fair
and reasonable.  The Board of Centerpulse has received a fairness opinion from
each of Lehman Brothers and UBS Warburg.  More detail on the fairness opinions
will be set out in the Centerpulse Offer documentation.  The Centerpulse
Directors unanimously recommend that shareholders of Centerpulse should accept
the Centerpulse Offer.



The Board of InCentive considers the terms of the InCentive Offer to be fair and
reasonable as it is equal to the Centerpulse Offer.  The InCentive Directors
unanimously recommend that shareholders of InCentive accept the InCentive Offer.
The four main shareholders of InCentive (which together hold 77% of all
outstanding InCentive shares) have already agreed to accept the InCentive Offer.




Data



Exchange rates of CHF 2.1756 : £1 and CHF 1.3915 : US$1 have been used in this
announcement.  Other information contained in this announcement (market data as
of 19 March 2003):



Smith & Nephew Share price           381.25p

Centerpulse Share price              CHF 277

Smith & Nephew Shares outstanding    929,128,403

Centerpulse Shares outstanding       11,853,153



There will be a meeting for analysts at 9.30 am GMT in London today at City
Presentation Centre, 4 Chiswell Street, Finsbury Square, London, UK, followed by
a teleconference for US analysts and shareholders at 3.30 pm GMT/10.30 am EST. A
press conference will be held at City Presentation Centre this morning at 11.30
am GMT.  Please call Mo Noonan at Financial Dynamics on  [phone]
for details.



The analyst meeting will be webcast as will the tele-conference today at 3.30 pm
GMT on www.smith-nephew.com/investors and on www.centerpulse.com/centerpulse/
investors/   High resolution photographs are available to the media free of
charge at www.newscast.co.uk



On Friday 21 March 2003, there will also be a meeting for Swiss analysts and
shareholders at 10.00 am GMT/11.00 am CET at Swissotel, Zurich-Oerlikon,
Switzerland.  Please contact Suha Demokan at Centerpulse on [phone]
for details.




ENQUIRIES:


Smith & Nephew                                                   Tel:  [phone]
Chris O'Donnell, Chief Executive
Peter Hooley, Finance Director
Angie Craig, Corporate Affairs Director


Centerpulse
Max Link, Chairman and Chief Executive
Urs Kamber, Chief Financial Officer
Beatrice Tschanz, Corporate Communications                       Tel:  [phone]
Suha Demokan, Investor Relations                                 Tel:  [phone]

InCentive                                                        Tel:  [phone]
Rene Braginsky, CEO and Delegate of the Board
Raoul Bloch

Lazard                                                           Tel:  [phone]
(Financial Advisers to Smith & Nephew)
Nicholas Shott

Cazenove                                                         Tel:  [phone]
(Brokers to Smith & Nephew)
Duncan Hunter
Tony Brampton

Dresdner Kleinwort Wasserstein                                   Tel:  [phone]
(Brokers to Smith & Nephew)
Jim Hamilton
Angus Kerr

Lehman Brothers
(Financial Advisers to Centerpulse)
Kenneth Siegel                                                   Tel:  [phone]
Henry Phillips                                                   Tel:  [phone]
Joseph Kohls                                                     Tel:  [phone]

UBS Warburg
(Financial Advisers to Centerpulse)
Karl Schmidt                                                     Tel:  [phone]
Liam Beere                                                       Tel:  [phone]

Lombard Odier Darier Hentsch & Cie
(Financial Advisers to InCentive)
Romeo Cerutti                                                    Tel:  [phone]
Marc Klingelfuss                                                 Tel:  [phone]

Financial Dynamics
(PR for Smith & Nephew)

London:  David Yates / Jonathan Birt                             Tel:  [phone]
New York:  Anton Nicholas / Deborah Ardern-Jones                 Tel:  [phone]




Lazard is acting for Smith & Nephew in connection with the Transaction and
no-one else and will not be responsible to anyone other than Smith & Nephew for
providing the protections offered to clients of Lazard nor for providing advice
in relation to the Transaction.



Lehman Brothers is acting for Centerpulse in connection with the Transaction and
no-one else and will not be responsible to anyone other than Centerpulse for
providing the protections offered to clients of Lehman Brothers nor for
providing advice in relation to the Transaction.



UBS Warburg is acting for Centerpulse in connection with the Transaction and
no-one else and will not be responsible to anyone other than Centerpulse for
providing the protections offered to clients of UBS Warburg nor for providing
advice in relation to the Transaction.



Lombard Odier Darier Hentsch & Cie is acting as financial adviser for InCentive
in connection with the Transaction and no-one else and will not be responsible
to anyone other than InCentive for providing the protections offered to clients
of Lombard Odier Darier Hentsch & Cie nor for providing advice in relation to
the Transaction.  In addition, Smith & Nephew has entrusted Lombard Odier Darier
Hentsch & Cie with the technical execution of the InCentive Offer.



No offer or invitation to acquire or exchange securities in Centerpulse or
InCentive is being made now.  Any such offer or invitation will only be made in
documents to be published in due course and any such acquisition or exchange
should be made solely on the basis of information contained in such documents.



The Centerpulse Offer will not be made, directly or indirectly, in or into, or
by use of the mails or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, Canada, Australia
or Japan.  Accordingly, copies of this document and any related documents are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from, Canada, Australia or Japan
and persons receiving this document and any related documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from, Canada, Australia or Japan.



Relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada; no prospectus has
been lodged with, or registered by, the Australian Securities and Investments
Commission or the Japanese Ministry of Finance; and the New Smith & Nephew Group
Shares have not been, nor will they be, registered under or offered in
compliance with applicable securities laws of any state, province, territory or
jurisdiction of Canada, Australia or Japan.  Accordingly, the New Smith & Nephew
Group Shares may not (unless an exemption under relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or indirectly in or
into Canada, Australia or Japan or any other jurisdiction as to do so may
constitute a violation of the relevant laws of, or require registration thereof
in such jurisdiction or to, or for the account or benefit of, a person in or
resident in Canada, Australia or Japan.



The InCentive Offer is not being made in any country where such offer would be
considered illegal or would otherwise violate any applicable law or regulation
or where Smith & Nephew may be obliged to change the terms of the InCentive
Offer, to file an additional application with any authorities or other
institutions or to undertake additional measures in relation to the InCentive
Offer. It is not foreseen to extend the InCentive Offer to such jurisdictions.
Documents in relation to this transaction must not be distributed in such
jurisdictions or sent to such jurisdictions. Persons in such jurisdictions must
not use these documents for marketing purposes for sales of shares of InCentive.




Forward-Looking Statements



This press release contains forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1998.  Statements that
are not strictly historical statements, including statements about Smith &
Nephew's and Centerpulse's beliefs and expectations, constitute forward-looking
statements.  By their nature, forward-looking statements are subject to risk and
uncertainty because they relate to events and depend on circumstances that will
occur in the future.  The forward-looking statements in this release include,
but are not limited to, statements addressing the following subjects:  expected
timing of the Transaction; future financial and operating results; actions to be
taken by the Combined Group following the Transaction; and the timing and
benefits, including synergy benefits, of the Transaction.  The following
factors, among others, could cause results to differ materially from those
described in the forward-looking statements:  inability to obtain, or meet the
conditions imposed for, regulatory approvals for the Transaction; the failure of
the shareholders of Smith & Nephew to pass the resolutions necessary to
implement the Transaction; the failure of the court to sanction the Court
Scheme; the failure of the minimum tender condition or the failure of other
conditions to the Offer; the risk that the businesses will not be integrated
successfully and that the expected synergies and cost savings will not be
achieved; and other economic, business, competitive and/or regulatory factors
affecting the businesses of Smith & Nephew and Centerpulse generally.  More
detailed information about such economic, business, competitive and/or
regulatory factors is set forth in Centerpulse's filings with the SEC.  Smith &
Nephew and Centerpulse are under no obligation, and expressly disclaim any
obligation, to update or alter their forward-looking statements, whether as a
result of new information, future events or otherwise.



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.


                                   APPENDIX I



                      CONDITIONS TO THE CENTERPULSE OFFER



The Centerpulse Offer is expected to be subject to the following conditions:



1.      The General Meetings of Smith & Nephew shareholders having:

a.    approved the transactions contemplated by the Centerpulse Transaction
Agreement; and

b.   passed the necessary resolutions to effect a Court Scheme under which Smith
& Nephew will become a wholly owned subsidiary of Smith & Nephew Group plc

and the Court Scheme having become effective.



2.      The Smith & Nephew Group shares to be issued in connection with the
Centerpulse Offer having been admitted to the Official List of the United
Kingdom Listing Authority and to trading on the London Stock Exchange plc and
the listing of the additional ADSs of Smith & Nephew Group on the New York Stock
Exchange to be issued in connection with the Centerpulse Offer having been
approved.



3.      All competent EU, US and other foreign authorities having approved and/
or granted clearance of the acquisition of Centerpulse without a party being
required to meet any condition or requirement giving rise to (a) costs and/or
loss of EBITA in excess of CHF 23 million in the aggregate; or (b) a decrease in
consolidated turnover of CHF 75 million in the aggregate of the Combined Group.
In addition, no other orders or directions by any court or other authority
prohibiting the completion of the Centerpulse Offer having been issued.



4.      The Registration Statement on Form F-4 to be filed by Smith & Nephew
Group with the SEC in connection with the Centerpulse Offer having become
effective in accordance with the provisions of the US Securities Act; no stop
order suspending the effectiveness of the Exchange Offer Registration Statement
having been issued by the SEC and no proceedings for that purpose having been
initiated by the SEC and not concluded or withdrawn.



5.      Smith & Nephew Group having received valid acceptances for at least 75%
of the total number of the Centerpulse shares outstanding (including Centerpulse
shares represented by ADSs and, provided the InCentive Offer has become or is
capable of becoming unconditional, Centerpulse Shares held by InCentive) on a
fully diluted basis at the expiry of the (possibly extended) offer period.



6.      Three of Centerpulse's current board members having resigned from
Centerpulse's board of directors subject to completion of the Centerpulse Offer,
and the other board members having entered into a fiduciary arrangement with
Smith & Nephew Group covering the period until a Centerpulse General Meeting
will have resolved to elect the persons proposed by Smith & Nephew Group to the
board of directors of Centerpulse, subject to completion of the Centerpulse
Offer.



7.      Centerpulse until the end of the (possibly extended) offer period (save
for extensions beyond the statutory 40 day trading period solely as a result of
the Court Scheme not having become effective) not having:

a.       become subject to a mandated recall for a product, the consolidated
turnover of which product family exceeded CHF 75 million in Centerpulse's
consolidated prior year results and such recall having resulted, according to
the opinion of an investment bank or accounting firm of international repute to
be appointed by Smith & Nephew Group with the consent of Centerpulse (the '
Expert'), in costs and/or loss of EBITA (after insurance payable to Centerpulse)
in excess of CHF 23 million; or

b.      suffered a disablement of its manufacturing facilities in Winterthur or
Austin having resulted, according to the opinion of the Expert, in costs and/or
loss of EBITA (after insurance payable to Centerpulse) in excess of CHF 23
million.



Smith & Nephew Group reserves the right to waive one or more of the conditions
set out above (other than conditions 1, 2, 3 as to the requirement to obtain
merger approval as such and 4), either in whole or in part, or to withdraw the
Centerpulse Offer if one or more of the above conditions is not met.


                                  APPENDIX II



                       CONDITIONS TO THE INCENTIVE OFFER



The InCentive Offer is expected to be subject to the following conditions:



1.      All conditions of the Centerpulse Offer having been satisfied or waived
by Smith & Nephew Group.



2.      The General Meeting of InCentive shareholders having:



a.       received the resignation of all current members of InCentive's board of
directors or required these to resign and elected the persons proposed by Smith
& Nephew Group as new members of the board of directors, subject to all other
conditions to this offer being accepted or waived by Smith & Nephew Group; and



b.      to the extent required approved the InCentive Transaction Agreement and
the actions contemplated thereunder.



3.      Smith & Nephew Group having received valid acceptances for at least 80%
of the InCentive Shares outstanding at the expiry of the (possibly extended)
offer period.



4.      No court or regulatory authority having issued a decision or an order
which prohibits the InCentive Offer or its completion or renders this offer or
its completion unlawful.



5.      InCentive or any of its subsidiaries not having disposed, or agreed to
dispose (including acceptance of any offer), of any Centerpulse Shares held by
it or its subsidiaries and not having become obliged to do so, save for any such
transfer within the InCentive group.



6.      Until the end of the (possibly extended) offer period no litigation
proceedings having been initiated against InCentive and its subsidiaries which
have not been made public prior to the date hereof and which are neither insured
nor provisioned for in the consolidated balance sheet of InCentive and whose
amount in dispute is in excess of CHF 35 million in the aggregate.


7.      The General Meetings of Smith & Nephew shareholders having passed the
necessary resolutions to effect a Court Scheme under which Smith & Nephew will
become a wholly owned subsidiary of Smith & Nephew Group plc, and the Court
Scheme having become effective.



Smith & Nephew Group reserves the right to waive one or more of the conditions
set out above other than condition 7, either in whole or in part, and to
withdraw the InCentive Offer if one or more of the above conditions is not met.


                                  APPENDIX III

                                  DEFINITIONS



The following definitions apply throughout this announcement, unless the contest
requires otherwise:

  'Act'                          the Companies Act 1985 (as amended)                                                  

  'Board' or 'Directors'         in respect of any given company, the directors of that company                       

  'Centerpulse'                  Centerpulse AG, Zurich, Switzerland                                                  

  'Centerpulse Offer'            the share and cash offer intended to be launched by Smith & Nephew Group on or about 
                                 16 April 2003 for all publicly held Centerpulse Shares                               

  'Centerpulse Shareholder'      a holder of Centerpulse Shares                                                       

  'Centerpulse Share'            registered shares of nominal value CHF 30 each in the capital of Centerpulse         

  'Centerpulse Transaction       the agreement dated 20 March 2003, whereby Smith &                                   
  Agreement'                     Nephew and Centerpulse have agreed to combine their businesses to create a leading   
                                 orthopaedics company                                                                 

  'Collective Mix and Match      the facility by which InCentive shareholders (in respect of                          
  Facility'                      InCentive's holding in Centerpulse) may under the InCentive Offer and Centerpulse    
                                 shareholders may under the Centerpulse Offer elect to take up more or less New Smith 
                                 & Nephew Group Shares than their basic entitlement, subject to matching elections    
                                 having been made by shareholders in Centerpulse and InCentive to elect to receive    
                                 more or less cash than their basic entitlement                                       

  'Combined Group'               Smith & Nephew Group, Smith & Nephew, Centerpulse and InCentive, and their           
                                 respective subsidiaries                                                              

  'Court'                        the High Court of Justice of England and Wales                                       

  'Court Scheme'                 a scheme of arrangement pursuant to section 425 of the Act sanctioned by order of    
                                 the Court whereby Smith & Nephew will become a wholly owned subsidiary of Smith &    
                                 Nephew Group                                                                         

  'EBITA'                        earnings before interest, tax and amortisation of goodwill                           

  'EBITDA'                       earnings before interest, tax, depreciation and amortisation of goodwill             

  'EPS'                          earnings per share                                                                   

  'Exchange Offer                the registration statement to be filed in the United States                          
  Registration Statement'        with the SEC and accompanied by a prospectus                                         

  'InCentive'                    InCentive Capital AG, Zug, Switzerland, an investment company listed on the Swiss    
                                 Stock Exchange                                                                       

  'InCentive Offer'              the share and cash offer intended to be launched on or about 16 April 2003 for all   
                                 publicly held InCentive Shares                                                       

  'InCentive Shareholder'        a holder of InCentive Shares                                                         

  'InCentive Shares'             bearer shares of nominal value of CHF 20 each in the capital of InCentive            

  'InCentive Transaction         the agreement dated 20 March 2003, whereby Smith &                                   
  Agreement'                     Nephew has undertaken to acquire, inter alia, InCentive's 19% of the share capital   
                                 of Centerpulse by way of a share and cash offer for InCentive through Smith & Nephew 
                                 Group                                                                                

  'Lazard'                       Lazard & Co., Limited                                                                

  'Lehman Brothers'              Lehman Brothers Inc.                                                                 

  'New Smith & Nephew            new ordinary shares in the capital of Smith & Nephew                                 
  Group Shares'                  Group to be issued in connection with the Offers and pursuant to the Court Scheme    

  'Offers'                       together the Centerpulse Offer and the InCentive Offer                               

  'Official List'                the Official List of the UK Listing Authority                                        

  'SEC'                          United States Securities and Exchange Commission                                     

  'Settlement Date'              the date on which the consideration due under the Offers is posted to Centerpulse    
                                 Shareholders and InCentive Shareholders                                              

  'Settlement Trust'             a trust set up by Centerpulse, pursuant to a court approved class action settlement  
                                 for US residents on 13 March 2002, to pay claims to class members in the US who      
                                 undergo surgery to replace an affected hip implant prior to 5 June 2003 or an        
                                 affected tibial base plate prior to 17 November 2003                                 

  'Smith & Nephew'               Smith & Nephew plc                                                                   

  'Smith & Nephew Directors'     members of the board of directors of Smith & Nephew                                  

  'Smith & Nephew Group'         a company to be called Smith & Nephew Group plc which will become the holding        
                                 company of the Combined Group                                                        

  'Smith & Nephew Shareholder'   a holder of Smith & Nephew Shares                                                    

  'Smith & Nephew Shares'        ordinary shares of 12 2/9 pence each in Smith & Nephew                               

  'Transaction'                  together the Offers and the Court Scheme                                             

  'UBS Warburg'                  UBS Warburg LLC, a wholly owned subsidiary of UBS AG                                 

  'UK' or 'United Kingdom'       United Kingdom of Great Britain and Northern Ireland                                 

  'US' or 'United States'        the United States of America, its territories and possessions and any state of the   
                                 United States and the District of Columbia                                           

  'US Securities Act'            United States of America Securities Act of 1933                                      
 






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