Medical device firms Sorin Group and Cyberonics have announced plan to merge and create a new global medical technology firm, NewCo.

Based on the closing price of both firms, the new entity is said to have a combined equity value of around $2.7bn (€2.4bn).

Sorin Group develops and markets medical technologies for cardiac surgery and cardiac rhythm disorders. Cyberonics is expertised in neuromodulation and markets FDA-approved Vagus Nerve Stimulation (VNS) Therapy system to treat refractory epilepsy and treatment-resistant depression.

As per terms of the transaction, each Cyberonics stockholder will receive one ordinary share of NewCo for every share of Cyberonics owned, and each Sorin shareholder will secure a fixed ratio of 0.0472 ordinary shares of NewCo for every Sorin share owned.

Once the deal concludes, Sorin shareholders will own 46% stake in NewCo, while the remaining 54% interest will be owned by Cyberonics shareholders.

The new company will focus more on three multi-billion dollar product categories, including heart failure, sleep apnea and percutaneous mitral valve. It is expected to play a crucial role in cardiac rhythm management, specifically in Europe and Japan.

Sorin CEO André-Michel Ballester will serve as CEO to NewCo, while Cyberonics CEO Dan Moore will act as non-executive chairman.

Subject to approval by both firm’s shareholders, the receipt of required antitrust and regulatory clearances, and other customary closing conditions, the deal is expected to be completed by third quarter of this year.