Straumann buys convertible bonds in South Korean implant maker

* Spends $30 million on convertible bonds in MegaGen

* Bonds include option to obtain a majority stake

* Part of drive to expand in growing, low-cost implants

ZURICH, March 31 (Reuters) - Swiss dental implants maker Straumann has bought $30 million of bonds that can convert into shares of South Korean company MegaGen, as part of a drive to strengthen its position in the growing market for low-priced implants.

The world’s largest maker of dental implants said on Monday the bonds, which bear 3 percent annual interest, included the option to be converted into shares in 2016, as well as an option to obtain a majority stake in MegaGen.

Faced with sluggish demand for premium implants in Europe as cash-strapped consumers cut back on expensive dental treatment, Straumann is expanding in the lower priced market, which makes up roughly 60 percent of industry volumes.

Chief Executive Marco Gadola said last year the company had up to 400 million Swiss francs ($450 million) available to spend on buying low-cost players in growing markets. The Basel-based firm already owns a 49 percent stake in Brazil’s Neodent.

“Some dentists are willing to pay for lower standards than those offered by premium brands, which has fuelled growth in the value segment,” Gadola said in a statement on Monday.

“To address their requirements and to capture this significant business opportunity, we are building a platform of value brands, in which MegaGen will have an important role.”

Founded in 2002, privately-owned MegaGen is a fast-growing dental implants maker with sales volumes of more than 30 million last year, of which two thirds were in Asia/Pacific, Straumann said.

The Daegu-based company will spend the proceeds of the bonds on expanding its domestic and international implant business as well as promoting its digital dentistry platform.

By 0945 GMT, shares in Straumann were trading up 1.1 percent at 191.00 Swiss francs, outperforming a 0.3 percent firmer European healthcare sector index.

$1 = 0.8870 Swiss Francs Reporting by Caroline Copley; Editing by Mark Potter