Baxter will pay for the deal with a combination of debt and cash. It expects the acquisition to close in the first half of next year. In total, the deal is worth about $4 billion, including debt.
Gambro makes dialysis products for patients with acute or chronic kidney disease, and Baxter said it had sales of about $1.6 billion last year.
Baxter has considered doing a deal with Gambro for years. Gambro is considerably smaller than Baxter, which has a market value of some $36 billion and had sales last year of $13.9 billion. The company also had more than $3 billion of cash as of September.
Baxter said dialysis treatment rates are rising by more than 5 per cent annually, partly due to growing rates of diabetes and high blood pressure. More than 2 million people globally are on some form of dialysis.
Dialysis involves removing blood from a patient, running it through a machine that cleans out impurities and then returning it to the patient's body. Baxter's medical device division makes products for kidney dialysis and intravenous administration sets to deliver medicines and fluids to patients.
Baxter also has a bioscience division that makes vaccines and high-tech treatments for hemophilia and other bleeding disorders, burns and shock, immune deficiencies and other blood-related conditions.
Baxter makes medical devices, pharmaceuticals and biotechnology products, focusing on areas including hemophilia, immune disorders and infectious diseases.
It divides its operations between a bioscience division, which generated just under half of company sales last year, and a medical-products division, which produced the rest.