(Reuters) - Danaher Corp <DHR.N> said it would buy Pall Corp <PLL.N>, a maker of water and air filters, for about $13.8 billion including debt and then split into two public companies.
The company retaining the Danaher name will comprise Pall Corp and Danaher's existing life sciences and diagnostics, dental, water quality and product identification businesses.
The other will be a diversified industrial company making test and measurement, retail fueling, telematics and automation products.
Danaher said it expects the tax-free separation to complete by the end of 2016.
Danaher's shares rose 5.7 percent to $90.94 in premarket trading on Wednesday.
Pall Corp's shares rose 4.8 percent to $124.35, just shy of Danaher's offer of $127.20 per share.
The offer represents a premium of 28 percent to Pall Corp's closing price on Monday before the Wall Street Journal reported Pall Corp was for sale.
Danaher said it expects to finance the deal mainly with available cash and the issuance of debt or new credit facilities.
(This story has been refiled to fix spelling of "split" in headline)
(Reporting by Sweta Singh and Ankur Banerjee in Bengaluru; Editing by Savio D'Souza)