UK-based Smiths Group is negotiating with Wartsila NSD to divest its John Crane-Lips division to Wartsila.

Wartsila NSD Corp. is a Finnish engineering group, the leading manufacturer of marine engines and propulsion systems. Wartsila employs 9,300 people in locations worldwide.

John Crane-Lips is a leading supplier of marine propulsion control systems, with particular market dominance in seals and bearings. The John Crane-Lips division of Smiths employs 1,000 people in four primary locations in the Netherlands, UK and Japan. Six more secondary sites are in the UK and USA.

In early 2000, Wartsila and Crane-Lips began a joint venture, Wartsila-Lips, offering customers a single end-to-end resource for integrated marine engine and propulsion systems.

In reviewing its various businesses, Smiths reportedly decided the John Crane-Lips division simply, "would be better placed under specialized ownership."

Wartsila commented on how it began negotiating for John Crane-Lips: "If Lips is for sale, we have to have a look at it. The alliance is more than satisfactory for us, but being unsure about future ownership prompted these discussions."