According to people familiar with the matter, the US medical device giant Baxter International(Baxter International) is in advanced talks to buy Hill-Rom Holdings for about $10 billion.

The deal values Hill-Rom at about $150 a share, a premium of about 13 per cent to Friday's closing price of $132.90.

Sources said that the two sides could reach an agreement as early as the middle of this week, but did not rule out the possibility that the negotiations could break down.

The move comes a month after it was reported that Hill-Rom had rejected a $9.6 billion offer, or $144a share, from Baxter as too low.

Headquartered in Chicago, Hill-Rom produces a range of hospital equipment, including stretchers, patient monitors, operating tables and electrocardiographs. So far this year, the company's shares are up 36%, while Baxter international's shares are down 7.8%.