NEW YORK (Reuters) - U.S. pharmaceutical and medical equipment maker Johnson & Johnson (>> Johnson & Johnson) said on Monday it agreed to sell its Cordis vascular technology unit to Cardinal Health (>> Cardinal Health Inc) for $1.9 billion (1.2 billion pounds), completing its exit from the cardiovascular stent business.

Cardinal, one of the largest U.S. drug distribution companies, is expanding its medical equipment offerings for physicians.

"While this transaction is not without obvious risks and does mark a change in CAH's overall business mix/business model, we believe the financial attractiveness outweighs this fact," Evercore ISI analyst Ross Muken said in a research note.

Cardinal, which expects the deal to close by the end of calendar year 2015, said the acquisition will be slightly dilutive to earnings in the fiscal year ending June 2016. It expects the deal to then boost earnings by 20 cents per share in the fiscal year ending June 30, 2017, and it sees cost savings of $100 million by the end of fiscal 2018.

Cardinal's chief executive, George Barrett, said the company may make more acquisitions in cardiology and endovascular treatment as well as in the trauma and wound care segment.

"Those are areas where we could see opportunities to fill out the portfolio," Barrett said in an interview.

Shares of Cardinal rose 1.4 percent, or $1.24, to $89.23, in early afternoon trading, while J&J rose 0.6 percent, or 64 cents, to $103.15.

J&J, which makes pharmaceuticals, medical equipment and consumer items, said it will still own its electrophysiology business and the drug Xarelto in the cardiovascular segment.

It exited the highly competitive drug-coated stent market four years ago because it was not a top player and faced competition from Medtronic Plc (>> Medtronic PLC), Abbott Laboratories (>> Abbott Laboratories), St Jude Medical Inc (>> St. Jude Medical, Inc.) and Boston Scientific Corp (>> Boston Scientific Corporation).

Cordis gets about 70 percent of its revenue from outside the United States, and its principal markets include Europe, China, and Japan.

The Cordis business includes wires and guides and other equipment used in cardiology and endovascular procedures. The latter includes products to treat aneurysms and to open up arteries such as in the abdominal aorta.

Cardinal was advised by Wachtell, Lipton, Rosen and Katz and Jones Day and by Goldman Sachs Group (>> Goldman Sachs Group Inc). J&J was advised by Cravath, Swaine & Moore LLP and Baker & McKenzie LLP and JP Morgan Chase (>> JPMorgan Chase & Co.).

(Reporting by Caroline Humer; Editing by Leslie Adler)

By Caroline Humer