BERLIN -- Fresenius Medical Care AG said yesterday it will acquire US-based Renal Care Group Inc. in a $3.5 billion deal that would make it one of the world's biggest dialysis care firms. Shares of Renal Care set a new high for the year in New York trading.
Fresenius said it would pay $48 a share for the Nashville-based company. The deal is subject to regulatory approval in the United States and Europe.
''This acquisition solidifies Fresenius Medical Care's position as the leader in dialysis services in the US," said Fresenius chief executive Ben Lipps. ''With its service network, Renal Care Group provides an excellent strategic and geographic fit to Fresenius Medical Care's operations in the world's largest dialysis market."
But analysts worried that Fresenius may have overpaid, and shares in the Bad Homburg-based company fell 3.1 percent to $78.36 at the close of trading in Frankfurt.
Fresenius said it hopes to close the deal by the second half of 2005, adding that it would create a company with estimated annual global revenue of $7.5 billion.
The deal came as Fresenius reported that its first-quarter profit rose 18 percent to $107 million for the January-March quarter. Revenue for the quarter was up 10 percent to $1.61 billion.
Renal Care also released its quarterly earnings yesterday, reporting a profit increase 12 percent over the same period a year ago. Revenues rose 35 percent to $374 million in the quarter ended March 31, compared with $278 million last year.
FMC is one of the biggest dialysis providers worldwide, treating nearly 126,000 patients at more than 1,630 clinics in Europe, Asia, Africa, and Latin and North America. It also provides outpatient service in 1,200 clinics and operates a joint venture for renal care with Kaiser Permanente, the US health maintenance organization.
The deal will also let Fresenius increase its share of the US dialysis service market to about 35 percent from its current 27 percent, Lipps said.
The largest US provider of kidney dialysis, Fresenius would have moved to second following the recent $3.1 billion deal between DaVita and Gambro AB. But with the Renal Care acquisition, Fresenius stands to remain number one, said Howard Bilow, executive vice president of Danvers, Mass.-based American Renal Associates Inc., the sixth-largest dialysis provider in the United States.