SAN FRANCISCO Asked during his presentation at last week's Frost & Sullivan Medical Devices Executive Summit to comment on last year's $9.5 billion deal that created GE Healthcare (Chalfont St. Giles, UK), Paul Smit, a top executive with medical imaging competitor Philips Medical Systems (Best, the Netherlands/Andover, Mass-achusetts), didn't shy away from the question.

In fact, he responded with some questions of his own.

Smit, senior vice president for strategy and business development for Philips Medical, said the merger of GE Medical Systems (Waukesha, Wisconsin) and Amersham (Little Chalfont, UK) to create GE Healthcare "is one of the biggest exercises of merging ever to take place in our industry."

Noting that the deal which closed a year ago next month represents the bringing together of "a pharma company and an equipment company," which have "totally different cultures," he said the question is: "How do you mix such cultures?"

Added to that, he said, is "the shock of the company now being headquartered in the UK," a considerable change for those at all levels of the former GE Medical.

Because it was such a huge deal and the integration of the two firms is so intricate and replete with elements that impact not just the resulting combined company but the industry as a whole, Smit said "everyone not just us is watching it closely."

From Royal Philips Electronics' own experience in integrating the Healthcare Solutions Group of Agilent Technologies (Palo Alto, California) after that sizable $1.7 billion deal closed nearly four years ago, Smit offered one rueful comment:

"We underestimated the task of integrating the IT [information technology] structure of Agilent, and that can kill a company. We'll do that better the next time," he said.

Jim Stommen, Executive Editor