Bloomberg News

Baxter Said to Near Deal to Buy Gambro for $4 Billion

November 24, 2012

Baxter International Inc. (BAX:US), the U.S. maker of blood products and intravenous drugs, is near an accord to buy Swedish kidney-dialysis competitor Gambro AB for about $4 billion, according to a person familiar with the talks.

An agreement may be signed in one or two weeks as the two parties discuss final terms, said the person, who asked not to be identified because talks are private. Baxter, which has been negotiating with Gambro for almost a year after weighing a bid for years, would be able to cut costs in areas such as research and development at the combined company, the person said.

The combination would help Deerfield, Illinois-based Baxter expand its dialysis-equipment business, whose machines can be used in home treatment. Gambro, which is jointly controlled by Sweden’s EQT Partners AB and Investor AB (INVEA), sells its equipment largely to hospitals and clinics.

Baxter gained (BAX:US) 4.1 percent to $68.81 at the close of trading in New York yesterday, its biggest single-day gain in a year and highest price since September 2008, after the Wall Street Journal originally reported the talks.

Investor AB (INVEB)’s policy “is not to comment on rumors,” Magnus Dalhammar, a spokesman for the company, said in a phone interview today. Investor owns 49 percent of Gambro.

Jussi Saarinen, a spokesman for EQT, which owns the other 51 percent through its IV fund, wasn’t immediately available. A spokeswoman at Baxter couldn’t immediately be reached for comment outside normal office hours.

Renal Products

Baxter is the world’s second-largest provider of kidney dialysis, trailing Bad Homburg, Germany-based Fresenius Medical Care AG, according to a Fresenius annual report. Gambro is ranked third. Renal products accounted for about 18 percent of Baxter’s $13.9 billion in revenue (BAX:US) last year, according to data compiled by Bloomberg.

Investor, the holding company for Sweden’s billionaire Wallenberg family, and EQT, a private-equity firm backed by the family, bought Gambro in 2006. The two investors sold non-core businesses and invested in Gambro after sales were dented by the U.S. Food and Drug Administration’s decision in 2006 to ban some of its dialysis monitors because of production flaws.

Gambro last year sold its CaridianBCT blood-machine unit for $2.63 billion, including debt, to Terumo Corp. (4543), Japan’s largest medical-device maker.

Baxter’s shares have risen 39 percent this year, giving the company a market value of about $38 billion. The company also had about $3.2 billion in cash (BAX:US) and near-cash items at the end of September.

Baxter has completed four acquisitions this year, according to data compiled by Bloomberg, with the largest being its $325 million purchase of Synovis Life Technologies Inc. for its line of soft-tissue repair products.

To contact the reporters on this story: Aaron Kirchfeld in London at akirchfeld@bloomberg.net; Jacqueline Simmons in Paris at jackiem@bloomberg.net; Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editors responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net; Reg Gale at rgale5@bloomberg.net


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Companies Mentioned

  • BAX
    (Baxter International Inc)
    • $76.64 USD
    • -0.23
    • -0.3%
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