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Tyco and Johnson set for merger

By Paul O'Donoghue

Published 26/01/2016

Security giant Tyco International - which owns CEM Systems in Belfast - is merging with manufacturing multi-national Johnson Controls.

The move will save the firms $150m (£105m) in taxes annually when they merge and shift their combined headquarters to Ireland.

But there was no indication of the impact on CEM Systems in Belfast, which employs around 80 people in producing security systems including ID badges and card readers.

Cork-based Tyco, valued at $13bn (£9bn), specialises in fire protection systems while US-based Johnson Controls, which has a market value of $23bn (£16bn), makes heating and ventilation systems and car batteries.

Although Tyco moved its global headquarters from Switzerland to Cork in 2014, the company was founded in the US and has the majority of its operations there. Its operational headquarters is in Princeton, New Jersey.

The two companies announced yesterday that they are to merge in a deal that will place the combined company's headquarters in Ireland. Johnson reported revenues of $37.2bn (£26bn) in its 2015 financial year, while Tyco's was $9.9bn (£7bn).

Under the terms of the agreement, Johnson Controls will own about 56% of the merged business and receive a cash payment of about $3.9bn (£2.7bn). Tyco has secured a $4bn bank facility to finance the cash aspect of the deal.

The combined company will continue to trade on the New York Stock Exchange. It will maintain Tyco's Irish legal domicile. The primary operational headquarters in North America for the combined company will be Milwaukee, where Johnson is based.

The merger will create savings of at least $500m (£351m) in the first three years, the companies said. They added that the transaction is expected to create "at least $150m in annual tax synergies". The companies didn't provide an exact value for the merger.

Belfast Telegraph

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