Engineering firm Smiths Group (LON:SMIN) saw shares rise 2 percent on Tuesday morning, after it confirmed it was in merger talks with US company ICU Medical.

Smiths Group have said it was in “very early discussions” over the sale of its medical arm, adding there was “no certainty” a deal would be concluded.

ICU make devices used in infusion therapy and oncology, and have a proven track record of takeovers. Last year the firm purchased Pfizer’s Hospira Infusion Systems arm for $900 million.

There is very little known about the merger at present, but it is likely to be more of a joint venture than a takeover by ICU.

Responding to takeover speculation over the last couple of days, Smiths said that it “routinely reviewed all options for its businesses to maximise value for shareholders.”

“Any actual‎ deal is probably still months away,” they added.

Revenue for the half-year to January was down 5 percent to £451 million, but Smiths said they were making “significant progress” on this. The group is likely to be valued at over £2 billion.

Shares in Smiths Group are currently trading up 2.66 percent at 1,765.83 (1125GMT).