updated 5/4/2005 7:56:12 AM ET 2005-05-04T11:56:12

Fresenius Medical Care AG said Wednesday it plans to buy U.S.-based Renal Care Group Inc. in a $3.5 billion deal that would make it one of the world's biggest dialysis care companies.

Fresenius said it would pay $48 a share for the Nashville, Tenn.-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 U.S.," said FMC 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 4.8 percent to euro59.40 ($76.36) in midday trading on the Frankfurt exchange.

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.

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 U.S.-based health maintenance organization.

Renal Care offers dialysis and nephrological care to more than 30,400 patients at 425 outpatient centers in 34 states. It also offers services to more than 200 hospitals. It had 2004 revenues of $1.35 billion.

CEO Gary Brukardt said the deal was a testament to Renal Care's drive to bring treatment to a wide area.

"By joining with Fresenius Medical Care, we will give our associates and affiliated physicians the opportunity to work with the world's leading dialysis therapy company, and our shareholders will receive an excellent return on their investment," he said. "We are convinced that our patients will be well served and will continue to receive high-quality dialysis care."

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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