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ZURICH/MADRID, Nov 11 (Reuters) - Switzerland's Novartis has agreed to sell its blood transfusion diagnostics unit to Spain's Grifols for $1.68 billion, in an increasingly buoyant market for pharmaceutical mergers and acquisitions.
Grifols, the world's third-largest blood products maker, said on Monday its diagnostics unit would make up 20 percent of its revenues after the deal, up from 4 percent now, and that annual turnover in the business would grow to around $1 billion.
The diagnostic business focuses on ensuring the safety of blood transfusions.
Novartis, meanwhile, said it was focusing more sharply on its remaining businesses.
"The acquisition of Novartis' diagnostic business is a step further into our vision to become a world leader also in the diagnostics field. To achieve this we knew we needed a significant presence in United States," said Victor Grifols, chairman of the Spanish company.
Pharmaceutical deals have been among the brightest spots in a small merger and acquisition revival in recent months, with Amgen's $10.4 billion purchase of Onyx Pharmaceuticals in the United States among bigger transactions.
Also on Monday, London-listed drugmaker Shire said it had agreed to buy ViroPharma for about $4.2 billion to create a leading force in treatments for rare diseases.
Grifols said it would finance its purchase with a $1.5 billion loan, pushing up its debt to 3.2 times earnings before interest, tax, depreciation and amortisation (EBITDA), according to a spokeswoman for the company.
The adjusted debt to EBITDA ratio was 2.6 times at the end of September.
The transaction requires regulatory approvals and is expected to be completed in the first half of 2014, the companies said.
(Reporting by Silke Koltrowitz, sarah White and Jose Elias Rodriguez; editing by Patrick Graham and Mark Potter)