TRANSACTION AGREEMENT

Exhibit 2.1

TRANSACTION AGREEMENT

dated 25 July 2005

by and among

Danaher Corporation,

Edelweiss Holdings ApS

and

Leica Geosystems Holdings AG

regarding the publication of a recommended public takeover offer for

all the publicly held shares of the Company

TRANSACTION AGREEMENT

TRANSACTION AGREEMENT (“Agreement”), dated as of 25 July 2005, by and among Danaher Corporation, a Delaware corporation and with IRS Employer Identification No. 59-1995548 (“Parent”), Edelweiss Holdings ApS, a company organized under the laws of the Kingdom of Denmark and registered with the Danish Commerce and Companies Agency under CVR-no. 28899505 and a wholly owned subsidiary of Parent (“Buyer”), and Leica Geosystems Holdings AG, a joint stock company (société anonyme, Aktiengesellschaft) organized under the laws of Switzerland and registered in Balgach at the following address: Heinrich-Wild-Strasse, 9435 Heerbrugg, Switzerland (the “Company”). Each of Parent, Buyer and the Company a “Party” and together the “Parties”.

Recitals

2

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Buyer and the Company hereby agree as follows:

3

affiliates and representatives abstain) from taking any actions outside the ordinary course of business consistent with the Company’s past practice; and (ii) shall, and shall cause each of its subsidiaries to, use all reasonable efforts to preserve intact its material business organization and relationships with third parties (including but not limited to its relationships with customers, suppliers, employees and business partners) and to keep available the services of their present officers and key employees.

Without limiting the generality of the preceding paragraphs, and except as required by applicable laws and regulations, without the prior written consent of Parent, the Company shall not, and shall cause its subsidiaries not to:

4

employee of any of the Company or any of its subsidiaries other than in the ordinary course consistent with past practice or with respect to normal and customary terms of such persons’ employment with such company; or

5

The term “Acquisition Proposal” means any proposal or offer from any person other than Buyer relating to any (1) tender or exchange offer involving Shares or other acquisition of Shares, (2) merger, consolidation or other business combination involving the Company or any of its subsidiaries, (3) direct or indirect acquisition or purchase of a business that constitutes a substantial part of the assets of the Company and its subsidiaries, taken as a whole, or a substantial amount of the equity securities of the Company or any subsidiary, (4) recapitalization or restructuring of the Company and its subsidiaries, or (5) other transaction similar to any of the foregoing with respect to the Company or any of its subsidiaries, other than the transactions contemplated by this Agreement.

6

the Board of Directors of the Company shall cause the Company not to enter into any letter of intent, agreement in principle, acquisition agreement or other similar acquisition agreement relating to any Acquisition Proposal. Following receipt of a Superior Proposal, the Board of Directors of the Company may, or may cause the Company to, enter into, discuss or negotiate any confidentiality, process or other similar process agreement relating to any Superior Proposal.

For purposes of this Agreement, “Superior Offer” means any unsolicited offer to all of the shareholders of the Company to acquire all of the Shares on terms and conditions that the Board of Directors of the Company determines in its good faith judgment, after due consideration of its fiduciary duties, (as advised by its advisors) to be superior for the Company’s shareholders when compared as a whole with the transactions contemplated by this Agreement, provided such offer is at a price that on a fully diluted basis is not lower than that offered by Buyer and on conditions no more restrictive on the offer than the Offer Conditions.

For purposes of this Agreement, a “Superior Proposal” means any unsolicited written proposal that contemplates a Superior Offer and that the Board of Directors of the Company (having consulted with its financial and legal advisors) reasonably believes is likely to result in a Superior Offer.

The Company shall not permit or provide access to non-public information relating to the Company and its subsidiaries to any third party other than (i) Hexagon, or (ii) any other third party, following receipt of a Superior Proposal or publication of a Superior Offer from such party or other than as required by Swiss law or imposed by the Swiss Takeover Offer Board. In the event that such access is provided or permitted in accordance with the foregoing, such access shall be provided on terms and subject to conditions no more favorable than those applied to Parent, Buyer and their respective representatives and advisors including, without limitation, with respect to timing. If the Company permits or provides access to information relating to the Company or its subsidiaries that it has not previously shared with Parent, Buyer, or their respective representatives or advisors, the Company shall notify Parent or Buyer that this information is available for review, and provide access to this information to Parent, Buyer, its representatives and advisors, at the same time as any other party.

For the whole duration of this Agreement, the Company shall abstain (and shall procure that its subsidiaries abstain) from:

7

From the date hereof, the Company shall be deemed to be acting in concert with Buyer in connection with the Offer within the meaning of Art. 24 para. 3 SESTA and Art. 11 Ordinance of the Swiss Takeover Board of Public Takeover Offers (“TOO”). Consequently, Buyer may be required pursuant to Art. 10 para. 6 TOO (the “Best Price Rule”) to increase the Offer Price if the Company, its subsidiaries, affiliates or representatives acquire equity securities of the Company at a price exceeding the Offer Price. Considering this, the Company shall abstain (and shall procure that its subsidiaries, affiliates and representatives acting on behalf of the Company abstain) from any action that may be found to be in breach of the Best Price Rule, and in particular from:

Pending completion of the Offer, Parent and Buyer may from time to time request access to the Company’s officers and directors with a view to discussing integration plans, such access to be made available at the Company’s discretion, but not unreasonably denied or delayed by the Company. Without limiting the generality of the preceding sentence, access shall not be deemed to be unreasonably denied or delayed if such denial or delay is required by applicable legal or regulatory requirements. Following completion of the Offer, the Company will, and will cause its subsidiaries, and each of their respective officers, directors and employees (collectively, the “Company Representatives”) to, give Parent and its respective officers, employees, counsel, advisors and representatives (collectively, the “Parent Representatives”) reasonable access, during normal business hours, to the assets, properties, offices and other facilities and to the books and records of the Company and its subsidiaries and will cause the Company Representatives and the Company’s subsidiaries to furnish Parent with such financial and operating data, access to customers and suppliers and such other information with respect to the business and operations of the Company and its subsidiaries as Parent may from time to time reasonably request and to the extent permitted under Swiss law. The Company shall furnish promptly to Parent a copy of each report, schedule, registration statement and other document publicly filed by the Company or any of its subsidiaries during such period. Parent agrees that any information furnished pursuant to this Section will be subject to the provisions of the Confidentiality Agreement.

8

The Company shall promptly, upon request, enter into its share register the Buyer or, as the case may be, the Parent or any of the Parent’s subsidiaries, as a shareholder with voting rights in respect of all Shares that the Buyer or, as the case may be, the Parent or any of the Parent’s subsidiaries, may own at the time the request is made.

Parent and Buyer agree, and agree to cause any party acting in concert with either of them, to notify the Company promptly of any purchase or agreement to purchase interest in the Shares entered into or completed prior to the Offer Expiration Date.

The Parties shall consult with each other prior to making any public announcement relating to the Offer other than the agreed press release pursuant to Section 2.1.

If the Offer is declared successful and Buyer so requires, the Board of Directors shall promptly convene a general meeting of shareholders to be held as soon as practicable with such agenda and proposals that shall have been submitted by Buyer, to the extent legally permissible.

The Board of Directors of the Company shall provide Buyer and Parent at least two trading days prior to the Offer Expiration Date, a confirmation that to the best of their knowledge as of the date of such confirmation no adverse events have occurred that, individually or in the aggregate, are or are likely to be material to the Leica Group within the meaning of Section 6(ii) of this Agreement.

In the event that the Offer is declared successful, the current members of the Board of Directors of the Company will resign as per the shareholders’ meeting to be convened pursuant to Section 4.10. Upon completion of the Offer, Buyer and Parent will offer to each member of the Board of Directors a customary mandate agreement covering the period between completion of the Offer and this shareholders’ meeting and Buyer and Parent will procure that discharge is granted to these members of the Board of Directors by the ordinary shareholders meeting for the fiscal year 2005/2006.

9

The Board of Directors of the Company undertakes not to amend, or permit the amendment of, any existing stock option plans granting rights in respect of Shares, including (without limitation) with respect to acceleration or changes of the vesting period under such plans, other than with the prior written consent of Parent.

The obligation of Buyer to complete the Offer is subject to the satisfaction or waiver of the offer conditions set forth in paragraph 2.6 of the Prospectus (the “Offer Conditions”) and set forth below:

10

Buyer reserves the right to waive, in whole or in part, one or more of these conditions.

Conditions (i) and (ii) above shall be deemed to be conditions precedent within the meaning of Article 13(1) of the Swiss Takeover Ordinance. Conditions (iii) to (v) shall, subject to the Swiss Takeover Board’s approval, be deemed conditions subsequent within the meaning of Article 13(4) of the Swiss Takeover Ordinance.

This Agreement shall only become effective and enter into full force and effect on the Launch Date.

This Agreement may be terminated (with any termination by Parent also being an effective termination by Buyer):

shall terminate automatically if Buyer declares the Offer successful and that the Offer is settled in accordance with its terms, on the earlier of (a) expiration of a period of six months following expiration of the additional acceptance period of the Offer or (b) the general meeting of shareholders which is to be convened pursuant to Section 4.11 having taken place.

11

In the event of a breach of this Agreement, the non-breaching party shall be permitted to bring a legal action against the breaching party for damages as provided by Section 9.4 hereof.

Parent hereby unconditionally and irrevocably guarantees to the Company, as primary obligor, the due, full and punctual performance of all Buyer’s present and future obligations and liabilities, covenants and agreements under this Agreement and the Annexes hereto in accordance with the terms thereof.

Parent and Buyer are aware that the acceptance of the Offer may trigger adverse tax implications for individual shareholders resident in Switzerland and holding the Shares as part of their private property. Parent and Buyer agree to take reasonable steps jointly with the Company to mitigate any such consequences, including through the request of tax rulings, so long as such steps do not result in any cost or liability for Parent, Buyer or the Company or otherwise result in an increase of the Offer Price.

Except as otherwise provided herein, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the party incurring such fees or expenses.

This Agreement shall be governed by and construed in accordance with the substantive laws of Switzerland, without regard to the principles of conflicts of laws thereof.

Any dispute, controversy or claim arising out of or in connection with this Agreement, including the validity, invalidity, breach or termination thereof, shall be settled by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force on the date when the notice of Arbitration is submitted in accordance with these rules. The number of arbitrators shall be three. The seat of the arbitration shall be in Geneva. The arbitral proceedings shall be conducted in English.

12

Any notice or communication under this Agreement shall be made in writing and shall be effective (a) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section 9.5 and the appropriate telecopy confirmation is received or (b) if given by any other means, when delivered at the address specified in this Section 9.5 (or at such other address for a party as shall be specified by like notice):

Danaher Corporation

2099 Pennsylvania Avenue, N.W.

12^th Floor

Washington, D.C. 20006-1813

U.S.A.

Telecopy No.: +1 ###-###-####

Attention: Vice President – Corporate Development

Leica Geosystems Holdings AG

Heinrich-Wild-Strasse

9435 Heerbrugg

Switzerland

Telecopy No: +41 ###-###-####

Attention: Chief Executive Officer

This Agreement, including the Annexes hereto, together with the Confidentiality Agreement, constitute and contain the entire agreement between the Parties, and supersede all other prior agreements and understandings, both written and oral, with regard to the subject matter thereof. In the event of inconsistencies between the Confidentiality Agreement and this Agreement, this Agreement shall prevail.

This Agreement may not be amended, except by an instrument in writing signed by each Party and no Party may waive compliance with any of the agreements or terms and conditions contained in this Agreement except by an instrument in writing.

Pending settlement of the Offer, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party without the prior written consent of the other party. Following settlement of the Offer, Parent and Buyer shall have the right to assign any or all of their respective rights and obligations to any subsidiary of Parent, provided that Parent shall grant a

13

comparable guarantee to that provided under Section 9.1 with respect to the performance of the obligations of any such subsidiary. Any attempted assignment not permitted under this Section 9.8 shall be null and void. The provisions contained in this Agreement are for the sole benefit of the Parties and their permitted successors and assigns, and they shall not be construed as conferring any rights or remedies on any persons other than the Parties and their respective successors and permitted assigns.

Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction. Upon a determination that any term or other provision is invalid or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law to the end that the transactions contemplated hereby are fulfilled to the extent possible.

The obligations of the Company under this Agreement shall be interpreted and construed in all respects in a manner that is consistent with the fiduciary duties of directors of company boards under Swiss law and rulings of the TOB.

[the next page is the signature page]

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first above written.

15