Zimmer Holdings ( ZMH) said Tuesday that it will offer to acquire Centerpulse, a Swiss medical device maker, for $3.22 billion in cash and stock.

Zimmer, a maker of orthopedic implants and trauma products, topped a competing bid from Britain's Smith & Nephew, according to a Dow Jones Newswires report.

Zimmer predicted that the acquisition would increase its earnings within a year, creating a company with annual sales of more than $2 billion. In 2002, Zimmer recorded worldwide revenue of $1.37 billion.

On Tuesday, Zimmer estimated its second-quarter earnings would be 39 or 40 cents a share, excluding the costs of the proposed merger. Last year it reported second-quarter earnings of 34 cents per share.

Shares of Zimmer were at $44 in midday trading, down $4.28, or 9%.