Smith & Nephew Plc, Europe's biggest maker of artificial knees and hips, said it would sell its gynaecology unit to medical device maker Medtronic Plc for $350 million.

The proceeds would be returned to shareholders through a $300 million share buyback, Smith & Nephew said on Wednesday.

The unit, which primarily comprises a system for uterine surgery, generated $56 million in revenue in 2015, slightly more than 1 percent of the company's total revenue.

The deal is expected to reduce adjusted earnings per share by less than 1 cent in 2016 and be neutral in 2017, Smith & Nephew said.

The Smith & Nephew deal follows Medtronic's investment in Mazor Robotics Ltd announced earlier in the day. The company plans to buy up to 15 percent in the Israel-based surgical robotic guidance maker.

Shares in Smith and Nephew were down 1 percent at 1139 pence on the London Stock Exchange at 1228 GMT. Medtronic's shares were unchanged in trading before the bell.

(Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Sriraj Kalluvila)