Australia's CSL Ltd., the world's second largest maker of blood plasma products, is buying smaller US rival Talecris Biotherapeutics Holdings Corp for $3.1 billion, to boost its presence in the fast-growing biopharmaceutical industry.

While CSL and Talecris are No.2 and No.3 in the list of plasma products manufacturers, Illinois-based Baxter International holds the top spot. Even post acquisition, it will remain numero uno by a margin of 25 per cent.

Talecris, which operates 56 plasma collection centers and two manufacturing facilities in the United States, is being sold by its private equity owners, Cerberus Partners and Ampersand Ventures. The acquisition is the largest ever made by an Australian healthcare company.

Analysts said the deal would lift Melbourne-based CSL's 2008/09 earnings per share by 10 percent, driven largely by cutting costs. The deal represents a price to core earnings multiple of 12.7, which fund managers said was fair, but CSL's scale of operations would enable it to extract cost savings.

CSL, which makes products out of blood plasma to treat immune deficiencies and blood disorders, like hemophilia, also reported a 30 per cent rise in fiscal 2008 profit to A$702 million. It also makes vaccines, like flu vaccine and licensed its cervical cancer vaccine to Merck & Co Inc.

Talecris, based in Research Triangle Park, North Carolina, generated $1.2 billion sales for the year to end-June and earned core earnings of $258 million.

CSL will raise $1.5 billion in a share sale to help fund the purchase and fund the rest of the acquisition with cash and a loan from Merrill Lynch & Co., which is advising on the deal, the Australian company said in a statement.

CSL shares were stopped from trading today pending the announcement. The stock closed at A$39 on Tuesday, having gained nearly 29 per cent over the past year. The new shares are being sold in a range of A$34.50-A$39.00 each, according to a offer document sent to investors. At the top of the range, CSL will sell 43.58 million shares, equivalent to about 8 percent of issued capital.

Plasma is the watery liquid in which blood cells are suspended. Doctors are increasingly using plasma-based products such as Talecris's Gamunex and CSL's Privigen to treat diseases in which immune cells attack the nervous system, such as MS and Guillain-Barre syndrome. The treatment is also being studied for Alzheimer's disease.

Talecris's products are in the fastest-growing segments of the $15 billion global plasma-product market. CSL will boost sales by more than a third with the purchase, which is almost four times larger than its 2004 acquisition of Aventis Behring.

The deal would also boost CSL's position against rivals Baxter International, Spain's Grifols and privately owned Swiss group Octapharma.

The global plasma therapies industry has grown at a compounded annual rate of 10 percent over the past decade, CSL said, as doctors look for new ways to treat bleeding disorders, infections and diseases. CSL expects the strong growth to continue.

"This is an important step forward for CSL…In a revenue sense, certainly 10 percent is not an unreasonable assumption with our current information," CSL Managing Director Brian McNamee told a briefing.

CSL expects synergy benefits of about $225 million per annum, to be realized over three years.