Shares in Smiths Group jumped 10.2% after it announced the deal. The company also said that first-quarter trading had been "resilient".
At the end of the day, the FTSE 100 index was up 122.38 points, or 1.99%, at 6,268.76.
Easyjet shares fell 4.1% despite news of another record profit.
Its full-year profits jumped 18% to Â£686m, the fifth year in a row that the carrier has reported record profits.
The airline's chief executive, Carolyn McCall, also said she did not expect any lasting impact on trading from the recent terror attack. On Monday, shares in airlines and firms in the travel sector fell sharply  following the attacks in Paris.
The UK's largest supermarket group, Tesco, rose 1.7% after Citigroup upgraded its rating on the the stock to "buy".
On the currency markets, the pound was little moved against the dollar at $1.5215 and rose 0.49% against the euro to â‚¬1.4298.
(Close): The London market rose strongly, with Smiths Group leading the way after it agreed a deal to cut its pension contributions.