In an effort to strengthen its contraceptive portfolio, German drug and chemical maker Bayer unveiled an all-cash deal on Monday to acquire birth-control maker Conceptus (CPTS) for $1.1 billion.

Under terms of the deal, Conceptus shareholders will receive $31 a share in cash, representing a 19.7% premium on its Friday close at $25.90.

Mountain View, Calif.-based Conceptus is known for its Essure permanent birth control procedure, which was approved by the FDA in 2002. Conceptus generates annual revenue of about $140 million and employed 286 people as of the end of last year.

"Bayer is committed to augmenting its organic growth with strategic bolt-on acquisitions. The acquisition of Conceptus represents an excellent fit for our health-care business -- specifically in the United States, the world's most important health care market," Bayer CEO Marijn Dekkers said in a statement.

Bayer said it plans to launch a public tender offer to acquire all of Conceptus within the next 10 business days.

The two companies said the transaction, which is subject to anti-trust approval in the U.S., is expected to close by the middle of 2013.

“We believe that under Bayer's ownership, the Essure product will more rapidly become the standard of care in our established markets, and will benefit in new markets from Bayer's global presence,” said Conceptus CEO D. Keith Grossman.

Bayer is headquartered in Leverkusen, Germany, and its health-care subgroup notched 2012 sales of nearly 19 billion euros.

While shares of Bayer slumped more than 2% on the news, Conceptus saw its shares soar 19.77% to $31.02 in premarket trading on Monday, putting them on track to extend their 23% 2013 rally.

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