Increases Position in Johnson Controls Inc (JCI)

Johnson Controls and Tyco will combine as the unprecedented pace of buyouts and mergers from past year rolls over into 2016.

This merger is the next phase undertaken by Johnson Controls toward becoming a leading global multi-industrial company.

Johnson Controls, which agreed to buy Ireland-based Tyco International Plc TYC.N on Monday, has been preparing to spin off its automotive seating and interiors business.

The inversion deal, although highly attractive to USA companies, has not gone down with American lawmakers who have vehemently criticised such transactions in recently months.

The White House on Wednesday declined to comment on the latest so-called tax-inversion deal by a major USA company, but said legislation was needed to close the loophole.

Johnson Controls, like the other recent high-profile inversion Pfizer, reaps substantial dollars from USA taxpayers.

The separation of the automotive experience segment is on track, Johnson Controls said Thursday, as sales in the unit fell 20% from a year earlier.

The newly combined company is expected to save at least $150 million annually in US taxes as result of this move. The Building Efficiency business is engaged in designing, producing, marketing and installing integrated heating, ventilating and air conditioning (HVAC) systems, building management systems, controls, security and mechanical equipment. Reincorporating overseas would allow Johnson Controls to avoid ever paying a dime in US income tax on profits now stashed in tax havens. The combination of Johnson Controls and Tyco would bring together a portfolio of access control, fire, security, HVAC and power products for buildings.

Johnson Controls is expected to resume repurchasing shares under the previously authorized share repurchase program from the second half of fiscal 2016. “And that’s what’s happened with this merger”, said Sheehy.

Oliver said that Tyco has undergone a transformation over the last three years from being a holding company to an operating company that is focused on growth and innovation. “Both companies’ share price has fallen significantly over the past year, and I’m sure markets will see this as a positive move, counteracting Johnson Controls over exposure to the weakening Chinese market”.

The company and City of Milwaukee have split the cost of a $500,000 study into the possible construction of a new skyscraper near Milwaukee’s lakefront. The stock’s 50 day moving average price is $37.55 and its 200-day moving average price is $42.27.

Johnson Controls shareholders will get US$3.9 billion in cash consideration.

Swift Transportation Company (NYSE:SWFT) [Detail Analytic Report] announced profit of $72.5 million in its fourth quarter.