Johnson Controls in advanced talks to buy Tyco International for around $20 bn
25 Jan 2016
Johnson Controls Inc, among the US largest car battery manufacturer, is in advanced talks to buy fire protection and security company Tyco International Plc in a deal that could be valued as high as $20 billion, The Wall Street Journal yesterday reported, citing
A deal could be announced as early as today, but the talks could fall apart at the last minute, the report said.
A completed deal would see Johnson Controls expand from a diversified manufacturer of auto parts, batteries and building controls to fire protection and security products company as well.
Based in Ireland and run from New Jersey, Tyco International provides commercial fire and security systems and has a market cap of $13 billion.
Tyco was split into multiple companies in 2011 after the tenure of former CEO Dennis Kozlowski, who was convicted in 2005 of securities fraud and other charges.
It spun off its electronics division, now called TE Connectivity, and the healthcare company now called Covidien Plc. (See: Tyco International to split into three public firms)
Tyco combined its commercial security business with fire protection unit to form a standalone commercial fire and security company.
This company designs, manufactures, sells, installs and services security, fire detection and fire suppression systems. The company's commercial security portfolio consists of video and access control products and services for commercial, industrial and governmental customers, as well as anti-theft/electronic article surveillance systems and associated services for retailers.
Tyco moved its headquarters to Cork, Ireland, but maintains its operational base in Princeton, New Jersey.
Founded in 1885 and based in Milwaukee, Johnson Controls is a global diversified technology and industrial leader having customers in more than 150 countries and has a market cap of about $23 billion.
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.
Over the years, it had acquired Michigan suppliers or plants, including buying Holland's Prince Automotive in 1996, in a $1.35 billion cash deal, with which it emerged as the world's largest automotive interior parts supplier.
It is now a major parts source to Detroit's Big Three auto companies and has a huge presence in the state. The company's automotive division is a big employer in Michigan - with facilities in Detroit, Lansing, Monroe, Battle Creek, Port Huron, Warren, Holland and Highland Park and a tech centre in Plymouth.
Last June, it announced that it would spin off its auto business by October 2016 as separate company in order to focus on its building efficiency and automotive battery business. (See: Johnson Controls to spin off auto parts business)
Amid concerns over its future growth Johnson Controls stock has fallen by more than 20 per cent, while Tyco stock has fallen by more than 25 per cent in the same period.
