Tyco to Split Into Three Companies

A plan to separate the firm's current portfolio of diverse businesses into three separate, publicly traded companies has been announced by Tyco International Ltd. (Pembroke, Bermuda).

The three businesses are Tyco Healthcare, Tyco Electronics, and Tyco Fire & Security and Engineered Products & Services. Tyco intends to accomplish the separation through tax-free stock dividends to shareholders, after which they will own 100% of the equity in the three publicly traded companies. Each company will have its own independent board of directors and strong corporate governance standards. Tyco intends to complete these transactions during the first quarter of 2007.

Tyco's board and senior leadership evaluated a broad range of strategic alternatives, including continuation of Tyco's current operating strategy, the sales of select businesses, and separation of only one of the businesses. However, they concluded that separating into three businesses would be the best way to position the companies for sustained growth and value creation.

With 2005 revenue of nearly U.S.$10 billion, Tyco Healthcare is an important global provider of healthcare products and services. Its product portfolio includes advanced surgical instruments and supplies, respiratory care products, contrast media and diagnostic imaging products, needles and syringes, vascular therapies, sutures, wound-care products, and generic pharmaceuticals.

The separation will create a stand-alone healthcare company that is expected to benefit from a focused and independent healthcare culture to help attract top industry talent and strategic partners as well as increase access to emerging healthcare-related technologies. This business will continue to be led by the current president of Tyco Healthcare, Rich Meelia, who will become the company's chief executive officer.

Tyco anticipates that all three companies will be capitalized to provide financial flexibility to take advantage of future growth opportunities. The companies are expected to have financial policies, balance sheets, and credit metrics that are commensurate with solid investment-grade credit ratings.




Related Links:
Tyco