Johnson Controls to buy Tyco International in $16.5-bn inversion deal

At least part of the benefit of the Johnson/Tyco deal was that it enabled Johnson to legally flee from U.S. corporation tax since, although it’s the bigger partner in the merger, the combined entity will be based in Ireland (Tyco’s home country).

Earlier this week, the companies announced a merger that will create a $32 billion company focused on products for commercial buildings – combining Johnson Controls’ heating and cooling equipment and controls business with Tyco’s fire and security system products business.

Shares of Johnson Controls, Inc.

Tyco International Ltd. (NYSE:TYC) is a diversified company, which provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products.

While most of the multitude of budding specialist IoT players are seldom valued beyond a few hundred million dollars today, Tyco and Johnson Controls are already giants. “It’s kind of an untapped world of available innovation in building management”. In May 2014, the Company announced that it has completed the sale of Tyco Fire & Security Services Korea Co.

“The market was estimated to be worth $62 billion in 2015, growing at rates above 6 percent through to 2020”, Bremner said. The company has a market cap of $14,213 million and the number of outstanding shares have been calculated to be 422,755,900 shares.

The Obama Administration is not keen on this type of agreement, but the boards of both Tyco and JCI have unanimously approved the deal, which should be closed by the end of fiscal 2016.

It makes products to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and seating components and systems for automobiles.

“I think the first thing to say is that this is not a feature of the Irish tax code, it has absolutely got to do with the U.S. tax code”.

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.

The move received widespread criticism in the USA with Hilary Clinton saying that she had a plan that she would immediately put in place, if elected, to stop tax inversions.

In related news, EVP Lawrence B. Costello sold 34,385 shares of the company’s stock in a transaction dated Friday, November 20th. The company’s president testified before a Senate panel and implored lawmakers to bail out the auto industry. During the day, the stock touched a high of $35.23 and low of $34.06. Woodstock increased its stake in shares of Johnson Controls by 0.9% in the fourth quarter. Current Tyco shareholders will own approximately 44 percent of the equity of the combined company.