GE Medical Systems, a unit of industrial giant General Electric Co., said Monday that it has agreed to buy Marquette Medical Systems Inc. for $808 million in stock to add heart-monitoring machines to its product line.
In another sign of rapid consolidation in the medical technology industry, Guidant Corp. said it will pay $850 million in cash for Sulzer Medica’s pacemaker and defibrillator business.
GE Medical Systems is the world’s No. 1 maker of magnetic resonance imaging and CT scan equipment. Under its acquisition agreement, Marquette shareholders would get $45 worth of GE stock for each Marquette share, a 64% premium to Marquette’s Friday close of $27.38. News of the deal sent Marquette shares soaring $15.13 to close at $42.50 in heavy trading on Nasdaq.
“It’s a significant opportunity to provide the customers--health-care providers--with a more complete line of products and services,” said analyst Michael Regan of Credit Suisse First Boston Inc., who has a “buy” rating on GE.
GE’s Milwaukee-based Medical Systems unit wants Marquette so it can expand its offerings to hospitals, said Charles Young, spokesman for GE Medical Systems group.
Marquette, which had revenue of $578 million last year, is the nation’s largest maker of electrocardiography equipment used to monitor vital signs. Marquette also is based in Milwaukee.
Medical systems accounted for about $4.5 billion of Fairfield, Conn.-based GE’s $90.8 billion in sales last year.
The number of GE shares issued to Marquette will depend on GE’s trading price in an unspecified period before the transaction closes.
GE shares rose $1.38 to close at $79.25 on the New York Stock Exchange.
Guidant is buying Sulzer’s Intermedics, Osypka and Oscor units.
The final purchase price would range from $775 million to $850 million, depending on sales produced by Sulzer representatives who decide to join Guidant.
Shares of Indianapolis-based Guidant fell $1.19 to close at $74; Switzerland-based Sulzer’s American depositary receipts fell $1 to $17.88. Both trade on the NYSE.