Johnson & Johnson, the world's largest health company by market value, and smaller rival Abbott are already the most diversified of the large U.S. and European players, but continue to snap up companies and products as part of the sector's resurgent M&A activity -- often at distressed prices due to the economic downturn.

Abbott said it would buy the drugs unit of Belgium's Solvay in a 4.5 billion euros deal giving it full control of its development partner's cholesterol treatments and exposure to emerging markets.

"In anticipation of future market needs, we are ensuring we have the technologies, products, infrastructure and reach," Abbott Chief Executive Miles White said in a statement.

Johnson & Johnson bought an 18 percent stake in Dutch biotech firm Crucell for 302 million euros as part of a flu vaccine development deal, Crucell said.

Abbott shares rose 0.7 percent to $47.66 in U.S. premarket trading, from their Friday close of $47.33 on the New York Stock Exchange.

Abbott had faced competition for Solvay from private equity-owned Swiss drugmaker Nycomed , which made a firm offer for the unit, and Takeda and UCB , which had also expressed some interest, people familiar with the matter said.

Takeover talks between Crucell and U.S. drugmaker Wyeth broke off in January after Pfizer moved in to buy Wyeth.

Vaccine-makers have been hot M&A targets recently, particularly for large drugmakers keen to secure new products as exclusivity on existing best selling products nears an end.

GlaxoSmithKline said earlier this month it was forming a partnership with Brazil's Fiocruz over the development of the Synflorix vaccine.

On Monday, the Financial Times newspaper reported that Glaxo had sealed a 1.5 billion euro deal with Brazil to guarantee sales of its pneumococcal vaccine over the entire life of the product.

FLU FOCUS

Abbott's deal includes Solvay's vaccines business, whose Dutch cell-based flu vaccine production facility, which can produce both seasonal and pandemic influenza vaccines, was validated earlier this month.

Abbott will finance its deal with cash and said it expected it to add $0.10 to ongoing earnings per share in 2010, doubling to more than $0.20 by 2012 and increasing thereafter, all before one-off transaction items expected in 2010-2012.

The company has been on an acquisition spree and this month bought medical device company Evalve Inc for $410 million and eye treatment firm Visiogen Inc for $400 million.

Johnson & Johnson's transaction will have an estimated dilutive impact of $0.02 to $0.04 on its 2009 adjusted earnings per share.

Crucell issued 14.6 million new Crucell shares to Johnson & Johnson, which paid about a 30 percent premium based on the average price of Crucell shares in the past 35 days, or about 20.63 euros per share.

Crucell said the collaboration will focus on developing "flu-mAb," a universal product targeting all influenza A strains.

That includes H1N1 strains which cause seasonal flu and the current pandemic flu, along with the H5N1, or avian, strain.

"A universal antibody or vaccine that protects against a broad range of strains would be an important advance in helping ... control acute epidemic and pandemic outbreaks," said Paul Stoffels, global head of pharmaceuticals R&D at Johnson & Johnson.

Analyst Ilja Zaanen at SNS Securities said: "This collaboration is a good deal for Crucell. Although the drug is still in a very early stage, Crucell would not have been able to support the expensive late clinical trials on its own."

Shares in Crucell were up 1.7 percent at 16.225 euros at 12:34 p.m., outperforming a 0.2 percent rise in Amsterdam's midcap index .

(Additional reporting by Jan Harvey, writing by Jason Neely, editing by Simon Jessop)