BD Biosciences and Waters Corporation reach an agreement for a $17.5 billion merger
Waters Corporation and Becton Dickinson (BD) Announce Multi-Billion Dollar Merger
In a significant move for the biosciences and diagnostics sector, Waters Corporation and BD's Biosciences & Diagnostic Solutions unit have agreed to merge in a deal valued at approximately $17.5 billion. The combined company is expected to have 2025 sales of about $6.5 billion.
Details of the Deal
The merger is structured as a tax-efficient Reverse Morris Trust and is subject to regulatory and shareholder approvals. BD's shareholders will own about 39.2% of the combined company, while Waters shareholders will own the remaining 60.8%. BD will receive a cash distribution of about $4 billion before the combination is completed, and Waters is expected to assume approximately $4 billion of debt related to the deal.
Expanded Market and Synergies
The merger significantly expands Waters' total addressable market to roughly $40 billion, with an annual growth rate of 5-7%. The combined entity will have a pro forma adjusted EBITDA of about $2.0 billion and annual recurring revenue exceeding 70%, with over 80% coming from well-known market-leading brands. The companies anticipate approximately $345 million in annualized EBITDA synergies by 2030.
Leadership and Operations
Waters CEO Udit Batra will lead the new entity, and Waters' headquarters will remain in Milford, Massachusetts. The BD business will be spun off generally tax-free to BD shareholders and simultaneously merged with a subsidiary of Waters. The combined company will continue to operate under the Waters name and retain its listing on the New York Stock Exchange.
Implications and Analysts' Views
Analysts note that although the flow cytometry business is strong and differentiated, investor sentiment might initially be cautious due to dilution and increased exposure to microbiology. However, the merger positions Waters closer to industrial peers such as Thermo Fisher Scientific and Danaher in terms of scale and financial profile, enabling competitive scale and room for continued smaller deals.
Jeff Jonas, portfolio manager at Gabelli Funds, believes the merger will not burden the combined company with excessive debt, allowing for continued smaller deal-making. Jefferies analyst Tycho Peterson expects merits from the transaction, citing the potential for scale and an attractive margin profile.
Background
BD announced in February 2025 its plan to separate the Biosciences & Diagnostic Solutions business, which generated $3.4 billion in revenue in BD's 2024 fiscal year. Waters will acquire BD’s flow cytometry and microbiology businesses, expanding its presence in life sciences and clinical diagnostics.
The merger is expected to close near the end of Q1 2026, subject to certain conditions. BD's life science business is not part of the deal with Waters.
This deal represents a strategic consolidation in the biosciences and diagnostics sector expected to deliver growth, synergy benefits, and improved competitive positioning for the combined company.
- The biosciences and diagnostics sector is set for growth, as Waters Corporation and BD's Biosciences & Diagnostic Solutions unit have agreed to merge in a deal worth approximately $17.5 billion.
- Analysts anticipate that the combined company, which is expected to have 2025 sales of about $6.5 billion, will reap synergies worth approximately $345 million by 2030.
- The merger will significantly expand Waters' total addressable market to roughly $40 billion, with an annual growth rate of 5-7%.
- The combined entity will have a pro forma adjusted EBITDA of about $2.0 billion and annual recurring revenue exceeding 70%, with over 80% coming from well-known market-leading brands.
- introduction of AI, medtech, and health-and-wellness technologies into the combined company's operations is expected to drive further growth and innovation in the industry.
- The merger positions Waters closer to industrial peers such as Thermo Fisher Scientific and Danaher in terms of scale and financial profile, enabling competitive scale and room for continued smaller deals.
- In the realm of finance and business, the merger is an example of a strategic consolidation expected to deliver growth, synergy benefits, and improved competitive positioning for the combined company. The move is also an indication of the ongoing evolution of the diagnostics industry through mergers and acquisitions (M&A).
