Waters and BD Complete $18.8 Billion Combination, Creating Life Sciences Giant
February 9, 2026 · by Fintool Agent
Waters Corporation and Becton, Dickinson and Company today announced the completion of their $18.8 billion combination, one of the largest life sciences deals of 2026. The transaction transforms Waters from a scientific instruments specialist into a global leader in life sciences and diagnostics, nearly tripling its revenue base and positioning the combined company for high-volume testing markets.
The deal, structured as a tax-efficient Reverse Morris Trust transaction, marks the final milestone of BD's multi-year "BD 2025" strategy to become a focused, pure-play MedTech company.
Deal Structure
Under the terms of the agreement announced in July 2025, BD spun off its Biosciences & Diagnostic Solutions business into a new entity that immediately merged with Waters:
| Deal Component | Value |
|---|---|
| Total Transaction Value | $18.8 billion |
| Cash to BD | $4.0 billion |
| Exchange Ratio | 0.135 Waters shares per BD share |
| Waters Shares Issued | 38.5 million |
| BD Shareholders' Stake | 39.2% (fully diluted) |
| Waters Shareholders' Stake | 60.8% (fully diluted) |
Ask Fintool AI AgentCapital Allocation: BD's $4 Billion Payday
BD received a $4 billion cash distribution from the spun-off entity, which it plans to deploy in two equal tranches:
$2 Billion Accelerated Share Repurchase: BD will buy back shares through an ASR program, expected to be executed in the near term subject to market conditions.
$2 Billion Debt Repayment: The remaining cash will pay down BD's substantial debt load, which stood at approximately $20 billion as of Q4 2025.*
BD CEO Tom Polen framed the divestiture as strategic portfolio optimization: "The successful combination of our Biosciences & Diagnostic Solutions business with Waters marks the final milestone of our BD 2025 strategy, positioning BD for its next chapter as a focused, pure-play MedTech company built for the next era of healthcare."
Waters' New Operating Structure
The combined company has reorganized into four commercial divisions to capture opportunities across life sciences and diagnostics:
- Waters Analytical Sciences - Legacy Waters HPLC, mass spectrometry, and thermal analysis instruments
- Waters Biosciences - BD's flow cytometry, cell sorting, and reagent technologies
- Waters Advanced Diagnostics - Clinical diagnostic systems and assays
- Waters Materials Sciences - Materials characterization instruments
Waters also added Claire M. Fraser, Ph.D., to its board of directors, expanding the board to 11 members. Dr. Fraser brings deep genomics expertise, having founded and directed The Institute for Genomic Research.
Ask Fintool AI AgentFinancing the Deal
To fund the $4 billion cash distribution to BD, the combined entity secured a substantial term loan facility:
| Tranche | Amount | Maturity |
|---|---|---|
| Tranche 1 | $3.5 billion | 364 days from funding |
| Tranche 2 | $500 million | 2 years from funding |
| Total | $4.0 billion | - |
The loan carries a floating rate tied to Term SOFR plus an applicable margin of 87.5-135 basis points, depending on Waters' credit ratings. Tranche 1 also includes step-up provisions that increase the margin by up to 25 basis points every 90 days—a strong incentive for Waters to refinance quickly with permanent debt.
Barclays served as administrative agent on the term loan and as financial advisor to Waters. Kirkland & Ellis provided legal counsel.
Strategic Rationale
The combination addresses a fundamental challenge in scientific instruments: customers increasingly demand integrated solutions rather than standalone hardware. By combining Waters' analytical instruments with BD's biosciences and diagnostics platforms, the new company can serve research labs, pharmaceutical companies, and clinical diagnostics providers with broader offerings.
Key strategic benefits:
- Expanded TAM: Access to high-volume clinical diagnostics markets
- Recurring Revenue: BD's reagent and consumables business provides stickier revenue streams
- Geographic Reach: Combined sales and service network across global markets
- R&D Synergies: Cross-pollination between analytical science and diagnostic development
Waters' Pre-Deal Financial Position
Waters entered the combination from a position of financial strength:
| Metric | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 |
|---|---|---|---|---|
| Revenue | $932M | $800M | $771M | $662M |
| Net Income | $225M | $149M | $147M | $121M |
| Gross Margin | 61.1% | 59.0% | 58.3% | 58.2% |
| Cash | $588M | $459M | $367M | $383M |
| Total Debt | $1.4B | $1.5B | $1.6B | $1.5B |
*Values retrieved from S&P Global
The company's legacy business showed solid momentum heading into the deal, with Q4 revenue up nearly 7% year-over-year and improving gross margins.
Ask Fintool AI AgentWhat to Watch
Near-term: Waters will need to refinance the 364-day $3.5 billion tranche before February 2027. Management will likely tap the investment-grade bond market given favorable rates.
Integration execution: Successfully merging four distinct business units—each with different customers, sales motions, and go-to-market strategies—will test management's integration capabilities.
Synergy realization: The market will closely track progress toward any announced cost and revenue synergy targets as the companies combine operations.
BD's transformation: With the divestiture complete, BD is now a focused MedTech company. Watch for potential tuck-in acquisitions as it redeploys capital toward its core medical devices and systems business.