Zimmer Holdings is to buy rival orthopaedic products maker Biomet for more than $13 billion.
According to Reuters, this latest deal in a wave of consolidations in the healthcare industry saw Zimmer shares rise more than 18% and the deal is expected to take Zimmer from the fourth-largest seller of orthopaedics products to number two behind Johnson & Johnson.
Zimmer, which expects to close the deal in the first quarter of 2015, said the combination would double the size of its spine and dental business, broaden its portfolio of products to treat bones, knees and hips, and give it an entry into the smaller but growing field of sports medicine.
"Biomet is a perfect fit for us," Zimmer chief executive, David Dvorak, was quoted as telling analysts and investors.
Morningstar analyst Debbie Wang told Reuters that the deal was even more important for Biomet as hospitals look to shore up profit by consolidating vendors.
"There's a lot of orthopaedic makers out there right now and the smaller ones were at great risk of being left behind," Wang said. "So for Biomet to hook up with one of the larger players, it really saved their business over the long haul."