425: Waters-BD SpinCo Merger Progresses, Leadership Confirmed

Waters Corporation provides an update on its proposed business combination with BD's Biosciences & Diagnostic Solutions business, confirming leadership and integration progress.

Summary

• Waters Corporation is progressing with the proposed business combination with Augusta SpinCo Corporation, a wholly owned subsidiary of Becton, Dickinson and Company (BD), which includes BD's Biosciences & Diagnostic Solutions business.
• The transaction is expected to be completed around the end of the first quarter of calendar year 2026.
• The first in-person summit for integration planning was held in September 2025 in Milford, Massachusetts, involving approximately 90 leaders from Waters' Integration & Transformation Office (IO) and BD's Separation Management Office (SMO).
• The summit established mutual business understanding, fostered relationships, and finalized 12 functional workstream charters for integration planning and execution.
• Udit Batra, Waters President & CEO, will lead the combined company as CEO, and Amol Chaubal will serve as SVP and Chief Financial Officer.
• For at least one year post-transaction close, incoming associates' base salary or wage rate and annual cash bonus opportunity will remain at least the same.
• Health and welfare benefits will remain the same at transaction close and will be harmonized over the following year.
• U.S.-based BD employees' 401(k) plans will transition to Waters Corporation's 401(k) plan after the transaction closes.
• Incoming BD associates will maintain their original service date with BD for various service-related benefits, such as paid time off.
• BD Biosciences celebrated the installation of its 1,000th BD Rhapsody System, which enables single-cell level biological mechanism deciphering.
• Waters launched the Xevo TQ Absolute XR Mass Spectrometer in June, noted for its sensitivity, robustness, and reliability in high-throughput labs, with positive early customer feedback.

Sentiment

Score: 8

Explanation: The communication is an employee-focused update, emphasizing positive progress, clear leadership, and employee benefit assurances. It highlights successful integration steps and product innovations, projecting confidence in the merger's path forward. While it includes a standard risk disclosure, the overall tone and content are highly positive regarding the transaction's progression.

Positives

• Significant progress in integration planning with the successful first in-person summit involving ~90 leaders from both Waters and BD.
• Clear leadership structure for the combined company announced, with Udit Batra as CEO and Amol Chaubal as SVP and CFO, providing certainty.
• Assurances provided to employees regarding salary, bonus, health, welfare benefits, and service date recognition for at least one year post-transaction, aiding employee retention and morale.
• Highlighting product innovation and market success with BD's 1,000th Rhapsody System installation and Waters' Xevo TQ Absolute XR Mass Spectrometer launch and positive customer feedback.

Risks

• One or more closing conditions, including regulatory and Waters shareholder approvals, may not be satisfied or waived in a timely manner or at all.
• A governmental entity may prohibit, delay, or refuse approval for the transaction, or impose conditions, limitations, or restrictions.
• The proposed transaction may not be completed on the expected terms, timeframe, or at all.
• Unexpected costs, charges, or expenses may result from the proposed transaction.
• Uncertainty regarding the expected financial performance of the combined company post-completion.
• Failure to realize anticipated benefits, including synergies, due to delays in completion or integration.
• Difficulties and delays in the combined company achieving revenue and cost synergies.
• Inability of the combined company to retain and hire key personnel.
• The occurrence of any event that could lead to the termination of the proposed transaction.
• Stockholder litigation or other legal proceedings may affect the timing or occurrence of the transaction or result in significant costs.
• Evolving legal, regulatory, and tax regimes could impact the transaction.
• Changes in general economic and/or industry-specific conditions or volatility from tariffs.
• Actions by third parties, including government agencies, could affect the transaction.
• The anticipated tax treatment of the proposed transaction may not be obtained.
• Greater than expected difficulty in separating SpinCo's business from other BD businesses.
• Disruption of management time from ongoing business operations due to the pendency of the transaction.
• Other effects of the transaction's pendency on relationships with employees, customers, suppliers, or other counterparties.

Future Outlook

The combined company anticipates completing the transaction around the end of the first quarter of calendar year 2026, with ongoing integration planning, including the determination of the full executive leadership team prior to close. The focus remains on achieving regulatory and shareholder approvals and harmonizing employee benefits over the year following the transaction close.

Management Comments

• "We have the opportunity now to reimagine the future of the company." Udit Batra, Waters President & CEO.
• "Our integration planning teams are working closely with senior leadership to define timelines for important decisions like this now."
• "We expect to determine who will serve on the combined company executive leadership team in advance of transaction close."
• "Executives from both companies will be in key leadership roles, Udit Batra will lead the combined company as CEO, and Amol Chaubal will serve as SVP and Chief Financial Officer."
• "For at least one year following transaction close, and subject to any local laws and processes, incoming associates base salary or wage rate and annual cash bonus opportunity will remain at least the same."
• "Health and welfare benefits will remain the same for employees of both companies at transaction close. We plan to harmonize our benefits over the following year and will thoughtfully manage the transition on a country-by-country basis."
• "All of you will play a crucial role in helping our combined company achieve its goals. In the meantime, stay focused on your existing roles, responsibilities, and business priorities, which remain unchanged as we continue to support our customers."

Industry Context

This merger update highlights the ongoing consolidation and strategic realignments within the life sciences, diagnostics, and analytical instrumentation sectors. The combined entity will be a significant player, leveraging Waters' expertise in mass spectrometry and BD's strengths in biosciences, particularly single-cell analysis with the Rhapsody System. The focus on high-throughput lab solutions and advanced analytical capabilities reflects a broader industry trend towards more precise, efficient, and integrated research and diagnostic tools.

Management Changes

Legal Proceedings

• Risk of stockholder litigation in connection with the proposed transaction or other litigation, settlements, or investigations that may affect timing or result in significant costs.

Stakeholder Impact

• **Shareholders:** Required to approve the transaction, will be impacted by the combined company's future performance and potential synergies.
• **Employees (Waters & BD):** Assurances on salary, bonus, and benefits for at least one year post-close, clarity on leadership roles, and integration into a new corporate structure.
• **Customers:** Continued support for existing products and services, potential for enhanced product portfolios and integrated solutions from the combined entity.
• **Suppliers:** Potential changes in supply chain relationships and procurement processes as the companies integrate.

Next Steps

• Continue weekly meetings and periodic in-person summits for IO and SMO leaders to discuss integration planning and transformation.
• Progress through regulatory approvals and Waters shareholder approval.
• Determine the full executive leadership team for the combined company in advance of transaction close.
• Transition incoming BD associates to Waters Corporation's 401(k) plan after transaction close, with more information on rollover options to be provided.
• Harmonize health and welfare benefits over the year following transaction close on a country-by-country basis.

Key Dates

Recommendation

The filing provides a positive update on the operational progress and leadership structure of the Waters-BD SpinCo merger, reducing some integration uncertainty. However, it does not contain new financial performance data or significant strategic shifts that would warrant a change in investment thesis. Investors are advised to hold, awaiting the transaction's completion and subsequent financial disclosures for a more comprehensive evaluation of the combined entity's value and growth prospects.

Keywords

Waters Corporation, Becton Dickinson, BD, Augusta SpinCo, Merger, Acquisition, Business Combination, Biosciences, Diagnostic Solutions, Integration, Mass Spectrometer, Rhapsody System, SEC Filing