NEW YORK -- In a deal that will combine two large providers of joint-reconstruction products, Zimmer Holdings (IW 1000/827) will acquire Biomet for $13.35 billion, the companies announced Thursday.

Zimmer, which provides spinal, trauma and dental devices, in addition to knee and hip replacements, will pay $10.35 billion in cash and $3.0 billion in stock for the privately held Biomet.

Both companies are based in Warsaw, Indiana.

Zimmer said the deal will create a leader in the $45 billion musculoskeletal industry.

The combination broadens the portfolio of products for consumers, boosts Zimmer's network of customer relationships and enables annual cost savings of about $270 million, the companies said.

"We believe that current demographic and macroeconomic trends affecting the healthcare industry will reward companies that successfully partner with other key stakeholders to improve patient care in a cost-effective manner," said Zimmer chief executive David Dvorak.

Biomet went private in 2007 following an $11.3 billion buyout by a private-equity consortium that included Goldman Sachs's buyout arm and Blackstone.

The acquisition deal came as consolidation heats up in pharmaceuticals and health care. As of Wednesday, companies in these sectors announced deals and potential transactions of $148.7 billion worldwide in 2014, making health/pharmaceuticals the second biggest sector in terms of deals after telecommunications, according to Dealogic.

Copyright Agence France-Presse, 2014