Johnson Controls and Tyco to merge
Johnson Controls and Tyco today announced plans to merge creating what the companies said in joint announcement will be a leader in "building products and technology, integrated solutions and energy storage."
The agreement has been unanimously approved by the boards of directors of both companies. Under the agreement, Johnson Controls shareholders will own approximately 56 per cent of the equity of the new combined company, receiving an aggregate cash consideration of about US$.3.9 billion. Tyco shareholders will own approximately 44 per cent.
“The proposed combination of Johnson Controls and Tyco represents the next phase of our transformation to become a leading global multi-industrial company,” says Alex Molinaroli, chairman and chief executive officer, Johnson Controls, in a company statement. “With its world-class fire and security businesses, Tyco aligns with and enhances the Johnson Controls buildings platform and further positions all of our businesses for global growth. Through this transaction, we will also expand our ability to further invest globally, develop new innovative solutions for customers and return capital to shareholders.”
“The combination of Tyco and Johnson Controls is a highly strategic, value-enhancing step that brings together the unique strengths of two great companies to deliver best-in-class building technologies and services to customers around the world,” adds George R. Oliver, chief executive officer, Tyco. “We believe this transaction will allow us to better capture opportunities created by increased connectivity in homes, buildings and cities. Joining forces with Johnson Controls pairs our leading established businesses with robust innovation pipelines and extensive global footprints to deliver greater value to customers, shareholders and employees of both companies.”
According to the companies, the businesses will be combined under Tyco International plc and subsequently renamed Johnson Controls plc. Upon closing, it is anticipated the company will be globally based in Tyco’s legal domicile of Cork, Ireland. In North America, the company will retain Johnson Controls HQ in Milwaukee.
The transaction is expected to close in fiscal 2016, pending regulatory approvals, as well as Tyco and Johnson Controls shareholder approvals.