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In a strategic play poised to reshape the diagnostics and life sciences landscape, Waters Corp. and Becton Dickinson and Co. (BD) announced Monday that they will combine BD’s Biosciences and Diagnostic Solutions unit with Waters in a $17.5 billion deal structured as a Reverse Morris Trust — a tax-savvy maneuver frequently used in corporate spinoffs.

The merged company is projected to generate $6.5 billion in revenue by 2025, cementing its position as a global leader in diagnostics, biotech tools, and life sciences instrumentation.

A Union of Complementary Strengths

Waters, known for its high-precision analytical instruments used in pharma, biotech, and life sciences, will absorb BD’s unit, which includes solutions for cancer research, immunology, and infectious disease diagnostics.

“We are bringing together two pioneering organizations... driven by strong R&D and customer focus,” said Waters CEO Udit Batra, who will lead the combined entity.

This marks a bold expansion into regulated diagnostics for Waters, effectively doubling its addressable market to $40 billion, while extending its global footprint and capabilities.

Deal Structure and Ownership Breakdown

The deal values BD’s unit at $17.5 billion, including a $4 billion cash payment to BD and assumption of debt. After the transaction:

• BD shareholders will own ~39.2% of the new company

• Waters shareholders retain ~60.8%

• Waters will remain headquartered in Milford, Massachusetts, keeping a significant presence at BD’s existing sites

The deal also unlocks $200 million in cost savings by year three and $290 million in synergies by year five, with projected revenue reaching $9 billion by 2030.

BD’s Strategic Realignment

BD, guided by CEO Tom Polen, aims to sharpen its identity as a pure-play medtech innovator, streamline its portfolio, and return capital to shareholders.

“This transaction enhances our strategic focus... while unlocking long-term value,” Polen said.

BD will also appoint two directors to the Waters board post-merger.

Behind the Scenes: Reverse Morris Trust Mechanics

In the Reverse Morris Trust, BD will first spin off the Biosciences and Diagnostic Solutions unit to its shareholders, then merge it with a Waters subsidiary. The structure provides a tax-efficient path to divestiture, popular in major corporate separations.

Advisers on the Megadeal

• Waters is advised by Barclays and legal team Kirkland & Ellis LLP, with partners David Klein, Daniel Wolf, Allie Wein, and Steven Choi.

• BD tapped Citi and Evercore as financial advisers, and legal counsel from Wachtell Lipton Rosen & Katz, led by David K. Lam and Jenna E. Levine.

The transaction is expected to close in early 2026, pending regulatory and shareholder approvals.