Baxter International (NYSE:BAX), the Deerfield, Ill.-based manufacturer of medical equipment to threat hemophilia, kidney disease and other conditions, said Tuesday it will pay $4 billion for Swedish dialysis-products maker Gambro AB as it seeks more of the lucrative global market in kidney dialysis therapy.

The deal would bring together two major providers of hemodialysis (filtering the blood when kidneys are in a state of renal failure) and peritoneal dialysis, which involves a permanent tube inserted into the abdomen that allows patients to be treated from home. Both treatments are life-extending alternatives to kidney transplantation.

Demand for the two therapies is growing worldwide due to the rising rate of diabetes, in part brought on by the world's growing middle class, whose members can now enjoy a richer diet but also, as a result, face a higher risk of kidney ailments than those in lower economic classes. About 350 million people in the world have diabetes, and the disease is growing at a rate of about 5 percent a year, according to the World Health Organization.

The acquisition would strengthen Baxter's position in Europe via Gambro's significant European presence and its access to the Swedish firm's customer base in Latin America and the Asia-Pacific region.

"Both companies have a long-standing heritage in kidney care with innovative technologies and a dedication to saving, sustaining and improving the lives of patients worldwide," Guido Oelkers, president and chief executive officer of Gambro, said in the announcement of the agreement.

With a market cap of $39 billion, Baxter had roughly $3.1 billion in cash and reported sales of $14 billion last year, so the acquisition would be manageable. News of the potential deal was previously announced in the Wall Street Journal last week. Baxter has long had its sights set on the privately held Stockholm-based firm, which was the first to introduce dialysis treatment to the world in 1967, according to the company’s bio.