Item 1A. Risk Factors

Risk Factors

Information regarding risk factors of the Company is set forth under the heading “Risk Factors” under Part I, Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 25, 2025. The Company reviewed its risk factors as of September 27, 2025 and determined that, except as set forth below, there were no material changes from the ones set forth in the Annual Report on Form 10-K. Furthermore, note the discussion of certain factors under the subheading “Special Note Regarding Forward-Looking Statements” in Part I, Item 2 of this Quarterly Report on Form 10-Q. These risks are not the only ones facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may have a material adverse effect on the Company’s business, financial condition and operating results.

RISKS RELATED TO THE MERGER

The consummation of the Merger is subject to significant risks and uncertainties and may not be consummated on the expected terms, if at all. Further, our failure to successfully integrate BD’s Biosciences and Diagnostic Solutions business within the expected timeline could adversely affect the combined company’s future results.

On July 13, 2025, the Company entered into the Merger Agreement and the Separation Agreement to purchase and combine BD’s Biosciences & Diagnostic Solutions business with the Company. The transaction is structured as a Reverse Morris Trust transaction, where BD’s Biosciences & Diagnostic Solutions business will be spun off to BD shareholders (such spin-off, the “Spin-Off”) and simultaneously merged with a wholly owned subsidiary of the Company. Consummation of the Merger is subject to receipt of required regulatory approvals, approval from the Company’s shareholders, the receipt of a private letter ruling from the Internal Revenue Service (the “IRS”) and satisfaction of other customary closing conditions. As a result, there can be no assurance that the Merger will be consummated on the expected terms, in accordance with the Company’s anticipated timeline, or at all. Any delay in consummation of the Merger, such as delays in obtaining regulatory approvals due to the U.S. government shutdown that began in October 2025, could result in increased transaction costs and professional fees and could cause disruptions to the Company’s business or business relationships, which could have an adverse impact on the Company’s results of operations. Additionally, if the Merger Agreement is terminated under certain circumstances prior to the consummation of the Merger, the Company will be required to pay BD a termination fee of $733 million.

In order to preserve the tax-free nature of the Spin-Off, the exchange ratio for the Merger (the “Exchange Ratio”) may be adjusted and increased if necessary, on the terms and subject to the conditions set forth in the Merger Agreement. In the event that the Exchange Ratio is adjusted upwards, the Company may issue a special dividend to the shareholders of the Company (the “Waters Special Dividend”) and/or the cash distribution to be paid to BD’s shareholders (the “SpinCo Cash Distribution”) may be decreased to account for the value of the additional shares issued to the Company’s shareholders. In addition, the grant of the IRS ruling is within the discretion of the IRS. We can offer no assurance concerning the extent of our and BD’s overlapping shareholdings at any closing of the Merger or assurance that the IRS ruling will be received. As a result, we can offer no assurance regarding the number of shares of common stock of the Company (the “Company Common Stock”) that may be issued in connection with the Merger. Any issuance of shares of Company Common Stock to shareholders of BD will dilute the ownership and voting interests of the Company’s existing shareholders. In addition, the Company’s stock price has been volatile since the announcement of the Merger, and it may continue to fluctuate significantly in response to the pendency of the Merger and any developments related thereto.

If consummated, the success of the Merger will depend, in significant part, on the successful integration of BD’s Biosciences and Diagnostic Solutions business with the business of the Company and our ability to grow the revenue of the combined company and realize the anticipated strategic benefits and synergies from the Merger. Difficulties in integrating the practices and operations of these two businesses may result in the combined company performing differently than expected, operational challenges or the delay or failure to realize anticipated benefits and synergies and could have an adverse effect on the Company’s business, financial condition, results of operations and/or cash flows.

The amount of debt that the Company may incur and/or assume in connection with the Merger is uncertain and may be substantial.

The SpinCo Cash Distribution is expected to be paid using proceeds from approximately $4.0 billion of new indebtedness to be incurred by SpinCo prior to the Distribution. The Company is expected to assume all indebtedness incurred by SpinCo in connection with the payment of the SpinCo Cash Distribution upon completion of the Merger. Additionally, as part of the Merger, the Company may be required to pay the Waters Special Dividend to the Company’s shareholders in an amount ranging from zero to approximately $1.8 billion, depending on the number of shares of Company Common Stock that may be issued in connection with the Merger. If the Waters Special Dividend is paid, the Company expects to fund it with new indebtedness and has entered into a 364-day bridge facility commitment letter with a financial institution in this regard, which is described in more detail under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Cash Flow from Financing Activities.” The size of the Waters Special Dividend that will ultimately be declared is uncertain and will remain so until the closing of the Merger. The Company’s substantially increased indebtedness following the consummation of the Merger may have the effect of, among other things, reducing the Company’s flexibility to respond to changing business and economic conditions, lowering its credit ratings, increasing its borrowing costs and/or requiring the Company to reduce or delay investments, strategic acquisitions and capital expenditures or seek additional capital to refinance its indebtedness.

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

In January 2019, the Company’s Board of Directors authorized the Company to repurchase up to $4 billion of its outstanding common stock in open market or private transactions over a two-year period. This program replaced the remaining amounts available under the pre-existing authorization. In December 2020, the Company’s Board of Directors authorized the extension of the share repurchase program through January 21, 2023. In December 2022, the Company’s Board of Directors amended and extended this repurchase program’s term by one year such that it expired on January 21, 2024 and increased the total authorization level to $4.8 billion, an increase of $750 million. In December 2023, the Company’s Board of Directors authorized the extension of the share repurchase program through January 21, 2025. In December 2024, the Company’s Board of Directors authorized the extension of the existing share repurchase program through January 21, 2028. As of September 27, 2025, the Company had repurchased an aggregate of 15.2 million shares at a cost of $3.8 billion under the January 2019 repurchase program and had a total of $1.0 billion authorized for future repurchases. The size and timing of these purchases, if any, will depend on our stock price and market and business conditions, as well as other factors.

The following table summarizes the Company’s stock repurchase activity for the three months ended September 27, 2025: