Johnson & Johnson on Monday announced it will purchase breast-implant maker Mentor Corp for $1.07 billion.

Holders of Mentor will get $31 a share, almost double last week’s close, in a deal that pushed the stock within cents of the offer price. Allergan Inc’s stock dropped 11% on the prospect of competing with J&J, the world’s largest health-care company. The acquisition is expected to close in the first quarter of 2009.

“The move into breast implants may surprise some, given the history of litigation and liability risk in the space,” said Michael Weinstein, a JPMorgan Chase & Co. analyst in New York, in a note to clients today. “J&J, however, appears comfortable enough with the risk profile after months, if not years, of due diligence on the opportunity,” said Weinstein, whose note saw “little to no chance” of a competing bid emerging.

Mentor generated $373.2 million in sales in the fiscal year ended in March, mostly from breast implants. Implant revenue dropped to $74.4 million in this year’s fiscal second quarter.