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St. Jude Medical Inc. says it is buying rival heart device maker AGA Medical Holdings Inc. for $1.04 billion, or $20.80 per share.

St. Jude is offering a premium of 41 percent compared to AGA's latest closing price. St. Jude is also taking on $225 million in debt held by AGA, and it says it expects the deal to close by the end of the year.

The St. Paul, Minn., company is one of the world's biggest heart device makers. Its products include implantable devices like defibrillators and pacemakers, which are used to keep heartbeats steady.

AGA, which went public in October 2009, makes devices that treat disease and repair structural problems in the heart. The Plymouth, Minn., expects at least $217 million in sales in 2010.

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