09:18 AM EDT, 07/14/2025 (MT Newswires) -- Becton Dickinson ( BDX ) has agreed to combine its biosciences and diagnostic solutions business with analytical laboratory instrument manufacturing company Waters (WAT) in a deal worth about $17.5 billion to focus on high-volume testing.

The transaction is structured as a Reverse Morris Trust, under which Becton Dickinson's ( BDX ) biosciences and diagnostic solutions business will be spun off to the firm's shareholders and simultaneously merged with a subsidiary of Waters, the companies said in a joint statement Monday. As part of the deal, Becton Dickinson ( BDX ) will receive a cash distribution of roughly $4 billion before completion, while Waters will assume about $4 billion of debt.

The deal, which requires approval from Waters' shareholders and clearance from regulators, is expected to close around the end of the first quarter of 2026. Following completion, Becton Dickinson ( BDX ) shareholders are anticipated to own about 39.2% of the combined entity, while current Waters investors will hold a stake of roughly 60.8%, according to the companies.

Shares of Becton Dickinson ( BDX ) edged down 0.5% in the most premarket activity, while Waters dropped 14%.

The combined company will be led by Waters Chief Executive Udit Batra. The new company will continue to operate under the Waters name and retain its listing on the New York stock exchange. Waters will remain headquartered in Massachusetts.

"The combination doubles our accessible market to approximately $40 billion and allows us to accelerate value creation in multiple high-growth adjacencies such as bioseparations, bioanalytical characterization, and multiplex diagnostics, while increasing the ratio of our annually recurring revenues," Batra said in the statement. "Together, we will work to make this combination a resounding success for our stakeholders and deliver significant value for shareholders."

The combined company is expected to deliver pro forma revenue of roughly $6.5 billion and about $2 billion in pro forma adjusted earnings before interest, taxes, depreciation and amortization for the current year. The companies estimate the merger to generate mid-to-high single-digit revenue growth and adjusted per-share earnings growth of mid-teens annually on a pro forma basis between 2025 and 2030.

The deal is projected to be accretive to adjusted EPS in the first year after completion and generate cost synergies of around $200 million by the third year, the firms said.

"We are bringing together complementary portfolios and channels that create an industry-leading life science and diagnostics company," according to Becton Dickinson ( BDX ) CEO Tom Polen. "This transaction is an important milestone for BD, as it enhances our strategic focus as a leading medical technology company."

Becton Dickinson's ( BDX ) biosciences and diagnostic solutions business, part of its life sciences division, is expected to generate revenue of about $3.4 billion in 2025. In May, the diagnostic and lab-testing devices maker reported fiscal second-quarter revenue of $1.25 billion in the life sciences segment, with diagnostic solutions contributing $440 million and biosciences adding $352 million.