CSL Ltd. (CSL.AU), the world's second-largest human plasma products producer, said Tuesday that the company will buy back up to A$1.59 billion of its stock in the next year after ending its proposed Talecris acquisition.

Late Monday, CSL and Talecris Biotherapeutics Holdings Corp. agreed to end their accord for the Australian company to buy North Carolina-based Talecris for US$3.1 billion because of opposition from the Federal Trade Commission on antitrust concerns.

Investors said the loss of Talecris won't significantly limit CSL because it has a wide range of products from influenza and anti-cervical cancer vaccines alongside its plasma business and could continue to grow organically.

CSL plans to buy back about 54.9 million, or about 9% of its outstanding stock at an assumed price of A$29 a share. At 0310 GMT, CSL was up 5.2% at A$30.50, while the benchmark S&P/ASX 200 index was down 0.3%.

Managing Director Brian McNamee told reporters on a conference call that CSL raised funds last year for the transaction and since the company is no longer buying Talecris it would be appropriate to return the funds to investors.

The blood products company raised A$1.75 billion last October, selling new shares at A$36.75 each, to help fund the Talecris transaction.

"The buyback will improve investment return ratios, such as earnings per share and return on equity to the benefit of shareholders," McNamee said.

He said the shortfall between the funds raised and the buyback amount was because 9% was the maximum amount of stock under Australian Securities Exchange rules that a company can buy back in 12 months.

A senior trader at a major broker said a A$29 a share buyback would boost CSL's earnings per share next fiscal year, which starts July 1, by 4% and by 8%-9% in fiscal year 2011.

The trader said the buyback is positive for CSL, given it had been priced for a protracted legal battle over Talecris and no buyback in the next nine months or so.

Citi analysts said in a client note that the buyback could boost EPS by 9.9% next fiscal year, assuming an Australian-U.S. exchange rate of US$0.75.

The ending of the Talecris deal is a positive for the company, "given that litigation hanging over the stock for at least four months would have inhibited any share price performance and been a distraction to management," Citi says.

"We are confident CSL will continue to produce steady growth with more muted intravenous immunoglobulin price increases in 2011," said Citi, which retained its buy recommendation on the stock.

CSL is expected to keep a "prudent level" of gearing after the buyback, McNamee said.

"We anticipate at the end of the share buyback if fully executed over the next 12 months we believe we would be in a net debt free position," he told reporters.

CSL would have the capability to make bolt-on acquisitions but isn't currently contemplating anything of the size of Talecris, he said.

"We have tremendous ability to consider bolt-on acquisitions," McNamee said. "We see opportunities and good valuations at the moment" but CSL is continuing to grow organically, he said.

Talecris Chairman Lawrence Stern said in a statement that with CSL "we have mutually agreed that litigation regarding the antitrust issue was not the path forward...We are disappointed that patients will not benefit from the efficiencies we saw in the proposed combination.

CSL will pay Talecris owners - private-equity firms Cerberus Partners and Tribeca Investment Partners - a US$75 million break fee, and the plasma-supply contract the companies made in connection with the merger agreement will remain in effect.

The company will take a A$80 million charge this fiscal year for costs related to the proposed transaction, McNamee said.

CSL last August reached a deal to buy Talecris, which would have boosted its share of the US$15 billion-a-year global market for plasma therapeutics, such as immunoglobulin, which is used to treat immune systems.

The deal called for CSL to pay US$1.9 billion in cash and take on Talecris' US$1.2 billion in debt.

Talecris is the third-largest producer of plasma medicines in the U.S., behind CSL and market leader Baxter International Inc.

The three companies control 83% of the U.S. market, which has consolidated to five players currently from 13 in 1990.

Last month CSL was told the FTC may pursue legal action to block the deal on competition concerns.

In the past week after talks with Talecris' owners and CSL's lawyers, McNamee said the board concluded that it was in the best interests of all parties to end the accord "rather than bury our organization in a complex, expensive and uncertain process."

"It is my preference to bite the bullet and end the uncertainties about the deal," McNamee said. "We cannot allow an open-ended and potentially acrimonious process to distract us from our business."

McNamee said that CSL was disappointed at the FTC's opposition to the transaction, "but a realistic approach dictates that we can't keep our organization on hold for an indeterminate period while we attempt to prevail with our world view over that of the FTC in the courts."

The company had offered remedies to address FTC concerns including divestment of up to 25 plasma collection centers, out of the combined company's 150, which produce about 800,000 liters a year, or between 4% and 5 of the U.S. market.

Analysts have said that Talecris may be sold or broken up into parts for sale to another buyer, possibly Octopharma AG, Grifols SA, ViroPharma Inc., Shire PLC or Johnson and Johnson, which could turn it into a stronger rival to CSL.

"(Talecris) is a damn good company, good people. They have a decent standalone game plan. I'm unaware of any move to change the organization," McNamee said.

If Talecris' owners want to offer assets to CSL, the company would be interested in talks, he said.

The potential break up of Talecris would benefit the industry as "Talecris has been the least disciplined player" and its takeover may improve US market dynamics, said Angus Gluskie, a fund manager at White Funds Management in Sydney.

"It would have been nice if CSL could have done that takeover itself but there's a small positive if one competitor is taken out of play," he said.

Steve Robinson, a fund manager at Alleron Investment in Sydney, who holds CSL stock, said he isn't concerned that Talecris may be broken up among CSL's large rivals because they will face the same antitrust opposition from regulators that blocked CSL's proposed transaction.

The CSL buyback will start June 23.

-By Andrew Harrison, Dow Jones Newswires; 61-3-9292-2095; andrew.harrison@dowjones.com

(David Rogers in Sydney contributed to this story)