Becton to merge biosciences and diagnostics arm with Waters in $17.5 billion deal

(Reuters) -Lab equipment maker Waters Corp will merge with larger rival Becton, Dickinson and Company’s Biosciences & Diagnostic Solutions business in a $17.5 billion Reverse Morris Trust deal, the companies said on Monday.

A Reverse Morris Trust deal allows a company to avoid a big tax bill by spinning off a unit that it wants to divest while simultaneously merging it with another company.

Shares of Waters Corp fell 5.8% premarket following the announcement, while Becton’s stock was down 2.3%.

The merger doubles Waters’ addressable market to $40 billion, enhances recurring revenue streams and accelerates expansion into areas such as bioseparations, bioanalytical characterization and multiplex diagnostics, the companies said.

The combined company’s 2025 revenue is expected to be about $6.5 billion.

The transaction, which is expected to close in the first quarter of 2026, will boost adjusted earnings per share in the first year, with targeted annual cost savings of $345 million by 2030.

Becton’s shareholders are expected to own about 39.2% of the combined company, while existing Waters shareholders will own the remaining 60.8%.

Becton’s biosciences and diagnostic solutions division produces diagnostic tools, including those used to identify infectious diseases and cancers.

(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Anil D’Silva, Mrigank Dhaniwala and Shreya Biswas)