July 14 (Reuters) -

Lab equipment maker Waters Corp ( WAT ) will merge with

larger rival Becton, Dickinson and Company's ( BDX ) 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 ( WAT ) 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.