Germany-based medical device company Siemens Healthineers has signed an agreement to acquire US-based radiation oncology treatment solutions provider Varian Medical Systems in a $16.4bn deal.

According to the agreed transaction, Siemens will receive all Varian shares for $177.50 each in cash. The company plans to finance the acquisition with a mix of debt and equity.

Varian specialises in the field of cancer care and is active in the area of oncology research and therapy.

The acquisition is expected to help Siemens to enter the cancer research and therapeutics markets.

Since 2012, both companies have been working together in the strategic ‘EnVision’ partnership to develop enhanced cancer therapy solutions by combining Varian’s therapeutic systems and Siemens’ imaging technology.

Siemens Healthineers CEO Dr Bernd Montag said: “With this combination of two leading companies, we make two leaps in one step – a leap in the fight against cancer and a leap in our overall impact on healthcare.

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“This decisive moment in the history of our companies means more hope and less uncertainty for patients, an even stronger partner for our customers, and for society, more effective and efficient medical care.”

Varian’s Board of Directors unanimously approved the acquisition, which is expected to close in the first half of next year. It is subject to approval by Varian shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.

Varian president and CEO Dow Wilson said: “With Siemens Healthineers, we will transform care for a greater number of patients worldwide, as well as broaden opportunities for our employees as part of a larger and more global organisation.

“That is why our board is confident that combining with Siemens Healthineers is the right path forward for Varian – delivering immediate and compelling value to our shareholders while bringing us even closer to our transformative vision of a world without fear of cancer.”