MANSFIELD – Health products giant Covidien Ltd. announced today that it will buy San Jose-based medical device firm VNUS Medical Technologies Inc. for $440 million.

Covidien (NYSE: COV) said the two companies’ boards of directors unanimously approved the deal, which calls for Covidien to pay $29 in cash for all shares of VNUS (Nasdaq: VNUS). The company said it expects the acquisition, which is subject to regulatory approval, to be completed by the end of next month.

The offer of $29 a share is a 36 percent premium over VNUS’s closing price on Thursday, Dow Jones Newswires reported.

VNUS develops medical devices for treating venous reflux disease, also known as venous insufficiency, the condition that causes varicose veins, which affects more than 25 million Americans, according to VNUS’s Web site.

“The acquisition of VNUS will allow Covidien to expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons and interventional radiologists,” Joe Almeida, president of Covidien’s medical devices division, said in a statement.

In 2008, VNUS posted a profit of $13.5 million, or 81 cents a share. The company’s annual sales grew 43 percent to $101.2 million, from $70.9 million in 2007. Separately, VNUS today posted a first-quarter profit of $1.9 million, or 11 cents a share, compared with a loss of $420,000, or 3 cents a share, in the same period a year ago, Dow Jones reported.

Brian Farley, president and CEO of VNUS, said making his company a part of Covidien will give it “access to extended global resources to further drive the growth of VNUS products around the world.” If the deal goes through, VNUS products will be included as part of the vascular product line in Covidien’s medical devices division.

Covidien said the deal is likely to dilute its earnings per share slightly in the 2009 fiscal year, but “the underlying strength of Covidien’s existing businesses is expected to offset this dilution.”

“As a result, Covidien does not anticipate this transaction will have a material impact on its fiscal 2009 sales or operating margin outlook,” the company said. Covidien’s fiscal years ends Sept. 30.

Dow Jones noted today: “Unlike many of its rivals, who are being hurt by hospital-spending cutbacks, Covidien sells mostly less-expensive medical products and equipment that won’t pressure budgets.”

Covidien last week said its net profit fell 30 percent during the first three months of the year to $184 million, or 36 cents a share, because of settlement payments, a stronger dollar and lower revenue from its imaging division.

Covidien Ltd. (NYSE: COV; BSX: COV) – formerly Tyco Healthcare – is a $9.91 billion manufacturer of medical devices and supplies for the global market. It became an independent public company in 2007 and has its U.S. headquarters in Mansfield, Mass., with other offices in 59 countries. Additional information is available at Covidien.com. Additional information on VNUS Medical Technologies Inc. is available at VNUS.com.