Smith & Nephew, the manufacturer of orthopaedic implants, yesterday shrugged off scepticism about its deal-making ability as it agreed to buy rival Plus Orthopedics for SwFr1,086 million (£460 million).

The purchase of Plus, a privately held company based in Rotkreuz, Switzerland, which specialises in artificial hips and knees, will make the UK company the world’s fourth-largest maker of orthopaedic reconstruction products with a 12 per cent market share. Before the deal, Smith & Nephew controlled about 9.5 per cent.

Plus was founded in 1991 and employs 850 staff with manufacturing operations in China and Switzerland. The company had revenues of SwFr367 million last year, up 16 per cent from 2005.

The bulk of the acquisition will be made in cash, but the UK company is also set to assume $190 million (£98 million) in debt.

The announcement came after Smith & Nephew was thwarted in two earlier efforts to buy larger rivals. Three years ago the company was outbid for Centerpulse of Switzerland by America’s Zimmer. Last year, it failed to buy US rival Biomet when a consortium of private equity firms mounted a successful counterbid worth $10.9 billion.

The two failed bids fuelled expectations that Smith & Nephew could itself become a takeover target.

Sir Christopher O’Donnell, the chief executive, said that the Plus deal would double Smith & Nephew’s share of the European orthopaedics market and would allow for cost savings of $40 million within three years. “It will allow us to put both sales forces together to sell both product ranges,” he told The Times.

The Plus deal means that Smith & Nephew has fulfilled its aim of becoming one of four leading players in the expanding $8.5 billion global hip and knee market. Nevertheless, the three market leaders, DePuy, Zimmer and Stryker, remain significantly larger with more than 20 per cent each.

Sir Christopher said that the door remained open for possible further acquisitions. He said the company was “working hard . . . on an active acquisition pipeline, but it’s horribly difficult to put a timescale on it.”

Smith & Nephew, which employs 8,800 people in 33 countries, has annual sales of $2.8 billion. Shares rose 16¼p to 631¾p on news of the deal.

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