Smith & Nephew, the replacement hips and knees maker, has agreed a SwFr1.1 billion (£460 million) deal to bolster its business in Europe.

The group is buying Plus Orthopedics, a Switzerland-based rival, in a move that will double its share of the European orthopaedic reconstruction market and make it the fourth-largest player in the global reconstruction market with a 12 per cent share.

DePuy, Stryker and Zimmer, the orthopaedics market leaders, all have more than 20 per cent of the market.

The all-cash deal, which includes the assumption of debt, comes only months after Smith & Nephew failed in a attempt to buy Biomet, an American rival sold to a private equity-backed consortium in December.

Plus Orthopedics' product range is largely made up of replacement hips and knees, although it also makes small joint and shoulder products.

Smith & Nephew said that Plus's product range was "highly complementary" to its own.

Sir Christopher O'Donnell, the chief executive of Smith & Nephew, said that he had been monitoring the privately owned Plus Orthopedics for a number of years.

"The acquisition marks a step change in our European presence and strengthens our portfolio of products," he said. "Our orthopaedics reconstruction business will have increased scale and scope as a result."

The group is expecting to achieve cost-savings of £40 million per year for the next three years.

"We see synergies come from leveraging the sales force in Europe and Asia, we see cost opportunities in manufacturing and we’ll be able to make better use of our combined marketing infrastructures," Sir Christopher said.

Plus reported profits before interest and tax of SwFr44 million last year, on revenues of SwFr367 million.

Smith & Nephew is financing the acquisition through bank borrowing.

Biomet was seen as an attractive target because of its presence in the US market, which is strengthening on the back of an increased number of procedures.

Smith & Nephew said last month that the market outside the US was "more mixed" as governments took action to limit spending on healthcare.

The US group opted for a $10.9 billion (£5.6 billion) deal backed by Blackstone, Texas Pacific Group, Kohlberg Kravis Roberts and Goldman Sachs.

Biomet is understood to have had concerns about possible competition issues.

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