UPDATE 1-Baxter to buy Sweden's Gambro for about $4 billion

Dec 4 (Reuters) - Baxter International Inc said on Tuesday that it would buy privately held Swedish dialysis product company Gambro AB for about $4 billion to complement its kidney therapy portfolio.

Baxter will finance the deal, which it expects to close in the first half of 2013, with debt and cash generated from overseas operations.

The company, which posted sales of $13.89 billion in 2011, manufactures kidney dialysis equipment, drug infusion pumps and blood therapy products. The Gambro acquisition will round out Baxter's renal business, which accounts for almost one-fifth of the company's revenue.

Gambro is one of the largest makers of equipment for hemodialysis, which is generally performed in a hospital or clinic. The dialysis from Baxter's machines is called peritoneal and can be performed at home.

Excluding special items, Baxter expects this transaction to reduce earnings per diluted share by 10 cents to 15 cents in 2013 and be neutral or add modestly to them in 2014.

Excluding the impact of special items and estimated amortization of intangible assets, the company said the deal should not affect earnings in 2013 and add 20 cents to 25 cents a diluted share to them in 2014.

Baxter said it expected the deal to add to earnings per diluted share, excluding special items, after 2014.

The company said it expected over five years to increase its sales by 7 percent to 8 percent, excluding the impact of currency fluctuations, on a compound annual basis, with earnings per diluted share, excluding special items, rising by 8 percent to 10 percent.