In this morning's Opening View, I mentioned news that General Electric (NYSE: GE) has agreed to buy the aerospace business of Britain's Smith Group for $4.8 billion in cash. This acquisition seems to signal that the Dow component wants to cash in on record new plane orders and the surge in demand for flight management technology and aircraft components. GE stated that the new business satisfies its ambition of going beyond the engine. The firm also noted that this acquisition will complement its existing aviation division to create a $16 billion giant. GE Chairman and Chief Executive Jeff Immelt stated that, this acquisition is consistent with our strategy to invest in high-technology infrastructure businesses that deliver strong growth, earnings expansion and higher margins.

GE also signed a letter of intent to combine its homeland protection division with Smiths' detection unit. The joint venture will be called Smiths GE Detection. Smiths will own 64 percent of the new company and GE will own the remaining 36 percent. Smiths GE Detection will have a strong focus on airport security devices.

Recently, Smiths had felt pressure to revamp and has also started to break up its assets. The company announced that it would return 2.1 billion pounds (or $4.1 billion) of the proceeds to the company's shareholders.