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Baxter's blockbuster: $4B for dialysis giant Gambro

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Turns out the rumors were true. Baxter ($BAX) came through with an agreement to acquire dialysis heavy Gambro AB for $4 billion, the industry's biggest deal of the year and Baxter's biggest ever.

With the buyout, Baxter is effectively doubling down on kidney dialysis devices. The Deerfield, IL, company is the world's second largest maker of kidney dialysis equipment, and Gambro is the third, so the resultant merger creates a behemoth in the sector, presumably vaulting Baxter over Fresenius ($FME), the current market leader.

Baxter figures it can augment its U.S.-centric operation with Gambro's strong European presence and growing peritoneal dialysis business in Latin America and Asia, CEO Robert Parkinson said.

"Baxter has a legacy of innovation in dialysis, including the development of peritoneal dialysis for the treatment of end-stage kidney disease patients in the home," Parkinson said in a statement. ''This acquisition further strengthens our global dialysis offerings by extending our portfolio in the hemodialysis segment."

That, of course, assumes the deal goes through as planned. Baxter expects the acquisition to close in the first half of next year, but it's possible regulatory authorities will raise an eyebrow at such a huge consolidation in one space, possibly spurring antitrust concerns similar to what Johnson & Johnson ($JNJ) faced with its $21.3 billion Synthes buyout.

Gambro is currently owned jointly by Swedish private equity firms EQT Partners AB and Investor AB, who bought the company in 2006 after production flaws with some of its dialysis machines led the FDA to temporarily ban their sale in the U.S. The company has rebounded since then, however, bringing in $1.6 billion in sales last year.

- read the statement

Special Report: The Top 10 Device and Diagnostics Deals of 2012

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