Waters and BD Biosciences Unit Agree to $17.5B Merger, Reshaping Lab Tools Landscape

In a major shake-up of the life sciences and diagnostics industry, Waters Corporation has announced a $17.5 billion merger with BD's biosciences and diagnostic solutions business. The deal, structured as a Reverse Morris Trust, is set to create a combined company with expected 2025 sales of about $6.5 billion and a total addressable market of approximately $40 billion.

Deal Structure and Financial Details

Under the terms of the agreement, BD will spin off its biosciences and diagnostics business, which will then merge with a Waters subsidiary. BD shareholders will own about 39.2% of the combined company, while Waters shareholders will retain 60.8% ownership. Additionally, BD will receive a cash distribution of approximately $4 billion before the combination is completed.

The transaction is expected to close near the end of the first quarter of 2026, subject to regulatory approvals and Waters shareholder approval. Waters CEO Udit Batra will lead the new entity, which will continue to operate under the Waters name and maintain its listing on the New York Stock Exchange.

Strategic Implications and Market Impact

This merger represents a significant expansion for Waters, doubling its total addressable market and positioning the company to compete more effectively with industry giants like Thermo Fisher and Danaher. The combined entity will benefit from a broader portfolio of products and services, including:

• Waters' analytical and informatics platforms
• BD's flow cytometry and microbiology businesses
• An installed base of over 25,000 BD flow cytometry machines and 40,000 diagnostic instruments worldwide

The deal is expected to generate about $200 million in cost synergies within three years and drive annual growth rates of 5% to 7%. However, initial market reaction has been mixed, with Waters shares falling more than 11% in early trading following the announcement.

Industry Outlook and Future Growth

The newly formed company will focus on high-volume testing and regulated settings, including biopharma quality assurance, molecular diagnostics, and infectious disease monitoring. With approximately 70% of its revenue mix linked to consumables and recurring sales, the combined entity is well-positioned for sustained growth in the coming years.

Waters CEO Udit Batra expressed enthusiasm for the merger, stating, "This is absolutely a perfect fit. Here comes BD with 70,000 more instruments, placed in every laboratory around the globe—and 20,000 are due for replacement in the next two years. We're chomping at the bit to get going."

As the life sciences and diagnostics landscape continues to evolve, this merger marks a significant milestone in the industry's ongoing consolidation and technological advancement.