BD Biosciences and Waters Corporation have reached an agreement for a $17.5 billion merger.
In a strategic move, Waters Corporation and Becton, Dickinson and Company's (BD) Biosciences & Diagnostic Solutions business have agreed to combine, creating a leading life science and diagnostics company. The deal, valued at approximately $17.5 billion, is expected to enhance Waters' presence in high-growth markets and increase its financial performance.
The merger structure involves Waters acquiring BD's Biosciences & Diagnostic Solutions business, which includes its flow cytometry and microbiology units. This structure allows for tax efficiency and aligns with Waters' strategic goals of expanding into high-growth segments.
After the merger, BD shareholders will own about 39.2% of the combined entity, while Waters will own 60.8%. Waters is expected to assume approximately $4 billion in debt, and BD will receive a cash distribution of about $4 billion.
The combined company is projected to generate approximately $6.5 billion in sales for 2025, with a significant portion of revenue coming from recurring sales due to its large installed base of instruments. The deal nearly doubles Waters' total addressable market to about $40 billion, with anticipated annual growth of 5% to 7%. This positions Waters closer in scale to competitors like Thermo Fisher and Danaher.
Combining Waters' liquid chromatography and mass spectrometry expertise with BD's flow cytometry and microbiology capabilities will enhance offerings in biopharma quality assurance, molecular diagnostics, and other regulated testing markets. The merger is expected to yield cost synergies of approximately $200 million within three years, enhancing the financial health of the combined company.
While there may be initial market reactions due to the size of the deal and increased debt, analysts see long-term benefits, including improved scale and margin profile. Jeff Jonas, portfolio manager at Gabelli Funds, states that the merger does not put too much debt on the combined company, allowing smaller dealmaking to continue.
The transaction, structured as a Reverse Morris Trust, will see the BD business being spun off tax-free to BD shareholders and merged with a subsidiary of Waters. Udit Batra will lead the new entity, and Waters' headquarters will remain in Milford, Massachusetts.
The deal is expected to close near the end of the first quarter of calendar year 2026, subject to regulatory approvals, Waters shareholder approval, and other closing conditions. The article recommends reading "M&A and a separation take center stage in latest earnings season" by Susan Kelly, published on Feb. 10, 2025, and "BD plans split from life science business to fuel medtech investment" by Nick Paul Taylor, published on Feb. 7, 2025, for further insights.
- The strategic merger of Waters Corporation and BD's Biosciences & Diagnostic Solutions business, worth approximately $17.5 billion, aims to form a leading life science and diagnostics company.
- The deal includes Waters acquiring BD's flow cytometry and microbiology units, aligning with Waters' goals of expanding into high-growth segments.
- Upon completion, BD shareholders will own about 39.2% of the combined entity, while Waters will own 60.8%, with Waters assuming approximately $4 billion in debt.
- The combined company projects generating approximately $6.5 billion in sales for 2025, with significant recurring revenue from its large installed base of instruments.
- Combining Waters' liquid chromatography and mass spectrometry expertise with BD's flow cytometry and microbiology capabilities will offer enhanced solutions in biopharma quality assurance, molecular diagnostics, and regulated testing markets.
- The merger is anticipated to yield cost synergies of approximately $200 million within three years, enhancing the financial health of the combined company, and analysts foresee long-term benefits such as improved scale and margin profile.
