Hill-Rom agrees deal to acquire Welch Allyn

Hill-Rom has agreed a deal to acquire fellow medical technology company Welch Allyn, a move that is expected to create a global leader in patient care solutions.

The $2.05 billion (1.3 billion pounds) deal has been approved by the boards of directors of both companies. It will see Welch Allyn shareholders receive $1.625 billion in cash and approximately 8.1 million newly-issued shares of Hill-Rom common stock.

Expected to be completed before the end of September, the merger will allow the firms to combine their unique strengths and nearly two centuries of medical device innovation experience to develop new technologies.

It will significantly increase Hill-Rom's size and scale, while delivering substantial cost and revenue synergies.

John Greisch, president and chief executive officer of Hill-Rom, said: "We look forward to welcoming the Welch Allyn team to Hill-Rom and combining our two great companies to continue our shared mission of improving patient outcomes and reducing patient costs."

The firm was able to increase its financial guidance for the full year after delivering better-than-expected results during the second quarter of 2015.