The new company is uniquely positioned as a leader in products, technologies and integrated solutions With a vision to create a safe, comfortable and sustainable world, a newly formed Johnson Controls begins operations following the successful completion of its merger with Tyco, marking a historic turning point for both companies. By uniting Johnson Controls, the number one provider of building efficiency solutions with Tyco, the number one provider of fire and security solutions, the new company is uniquely positioned as a leader in products, technologies and integrated solutions for the buildings and energy sectors. Powerful CombinationWith $30 billion in revenue and 117,000 employees (following the anticipated spinoff of the Adient automotive business in October), this powerful combination brings together best-in-class product, technology and service capabilities across controls, fire, security, HVAC and energy storage, to serve the full spectrum of end markets including large institutions, government, commercial buildings, retail, industrial, small business and residential. Tyco and Johnson Controls’ buildings platforms create immediate opportunities for growth through cross-selling, complementary branch and distribution channel networks, and expanded global reach for established businesses. Expanding Global Energy Storage Market The company is uniquely positioned to drive innovations in technology and business models to support smart buildings, campuses and cities Longer term, the company is uniquely positioned to drive new innovations in technology and business models to support the smart buildings, campuses and cities of the future as well as building upon strategic, high value-added services driven by data analytics and connectivity like the Retail Solutions and Connected Services businesses. Johnson Controls also will have one of the largest energy storage platforms with capabilities spanning the technology spectrum to serve an expanding global energy storage market. “We are more than just two businesses that have come together – we are now one team uniquely positioned to create value,” said Alex Molinaroli, Johnson Controls chairman and CEO. “Our combined insights and world class technologies will help build even smarter, more secure and more sustainable environments that help our customers win and broadly move the world forward.” Integrated Solutions For Buildings And Energy Sectors As a result of the robust integration planning already in place, the company is on track to realize $1 billion of savings related to previously announced merger synergies and productivity initiatives. “In addition to identifying significant synergies and improvements, our integration teams put us in position to complete the merger a month ahead of schedule so we can hit the ground running and realize the value of the merger for customers and shareholders,” said George R. Oliver, Johnson Controls president and chief operating officer. “We are ready to integrate the skill sets and capabilities of both companies and develop solutions to meet our customers’ needs in ways neither company could on its own.” As previously announced, Johnson Controls’ automotive business is still on schedule to spin off into an independent company, known as Adient, on Oct. 31, 2016.
Johnson Controls and Tyco will function independently up till the close of merger around Oct. 1, 2016 Johnson Controls and Tyco International has announced the senior executive team that will lead the combined company following the close of their planned merger, which is expected on or around Oct. 1, 2016. New Roles As previously announced, at the effective time of the merger, Johnson Controls Chairman and Chief Executive Officer Alex Molinaroli will be appointed to the same role for the combined company. Tyco Chief Executive Officer George Oliver will serve as President and Chief Operating Officer, with responsibility for the operating businesses and leading the integration, and will become a director on the new company's board. Mr. Molinaroli will serve as Chairman and Chief Executive Officer for 18 months after the closing. At that time, Mr. Oliver will become Chief Executive Officer and Mr. Molinaroli will become Executive Chair for one year, after which Mr. Oliver will become Chairman and Chief Executive Officer. "We are pleased to reach this major milestone on our journey to bring two great companies together to create a global leader in building products and technology, integrated solutions and energy storage," said Mr. Molinaroli. "This team of talented executives will ensure the combined company continues to thrive, grow and create unique value for our customers and shareholders. We are looking forward to bringing our complementary capabilities together to turn the possibilities for smart buildings and urban environments into reality around the world." Corporate Executive Officers "We are looking forward tobringing our complementarycapabilities together to turnthe possibilities for smartbuildings and urban environmentsinto reality around the world" In addition to Mr. Oliver, upon completion of the merger the following enterprise leaders will report to Mr. Molinaroli: Grady Crosby will serve as Vice President, Public Affairs & Chief Diversity Officer – currently holds the same role with Johnson Controls Simon Davis will serve as Vice President & Chief Human Resources Officer – currently holds the same role with Johnson Controls Kim Metcalf-Kupres will serve as Vice President & Chief Marketing Officer – currently holds the same role with Johnson Controls Judy Reinsdorf will serve as Executive Vice President & general counsel – currently holds the same role with Tyco John Repko will serve as Vice President & Chief Information Officer – currently Chief Information Officer & Enterprise Transformation Leader with Tyco Brian Stief will serve as Executive Vice President & Chief Financial Officer – currently holds the same role with Johnson Controls Jeff Williams will serve as Vice President, Operations & Engineering – currently holds the same role with Johnson Controls Business Leaders Upon completion of the merger, the following business leaders will report to Mr. Oliver: Bill Jackson, Executive Vice President & President, Building Efficiency Trent Nevill, Vice President & President, Asia Pacific Colleen Repplier, President, Fire Protection Products Girish Rishi, Executive Vice President, North America Integrated Solutions & Services and Tyco Retail Solutions Mike Ryan, President, Security Products and Life Safety Products Johan Pfeiffer, Executive Vice President, Rest of World Integrated Solutions & Services Joe Walicki, Vice President & President, Power Solutions Until the close of the transaction, Johnson Controls and Tyco will continue to operate independently under their current leadership structures.
Johnson Controls and Tyco announced that they have entered into a definitive merger agreement under which Johnson Controls, a global multi-industrial company, will combine with Tyco, a global fire and security provider, to create the leader in building products and technology, integrated solutions and energy storage. Under the terms of the agreement, which has been unanimously approved by both companies' Boards of Directors, Johnson Controls shareholders will own approximately 56 percent of the equity of the combined company and receive aggregate cash consideration of approximately $3.9 billion. Current Tyco shareholders will own approximately 44 percent of the equity of the combined company. "The proposed combination of Johnson Controls and Tyco represents the next phase of our transformation to become a leading global multi-industrial company," stated Alex Molinaroli, chairman and chief executive officer, Johnson Controls. "With its world-class fire and security businesses, Tyco aligns with and enhances the Johnson Controls buildings platform and further positions all of our businesses for global growth. Through this transaction, we will also expand our ability to further invest globally, develop new innovative solutions for customers and return capital to shareholders." "The combination of Tyco and Johnson Controls is a highly strategic, value-enhancing step that brings together the unique strengths of two great companies to deliver best-in-class building technologies and services to customers around the world," said George R. Oliver, chief executive officer, Tyco. "We believe this transaction will allow us to better capture opportunities created by increased connectivity in homes, buildings and cities. Joining forces with Johnson Controls pairs our leading established businesses with robust innovation pipelines and extensive global footprints to deliver greater value to customers, shareholders and employees of both companies." "With its world-class fire and security businesses, Tyco aligns with and enhances the Johnson Controls buildings platform and further positions all of our businesses for global growth" Under the terms of the proposed transaction, the businesses of Johnson Controls and Tyco will be combined under Tyco International plc, which will be renamed "Johnson Controls plc." The companies expect that shares of the combined company will be listed on the New York Stock Exchange and trade under the "JCI" ticker. Upon the closing of the transaction, the combined company is expected to maintain Tyco's Irish legal domicile and global headquarters in Cork, Ireland. The primary operational headquarters in North America for the combined company will be in Milwaukee, where Johnson Controls has been based. Strategic Rationale - Near-Term Growth And Product Innovation The combined company brings together best-in-class product, technology and service capabilities across controls, fire, security, HVAC, power solutions and energy storage, to serve various end-markets including large institutions, commercial buildings, retail, industrial, small business and residential. The combination of the Tyco and Johnson Controls buildings platforms creates immediate opportunities for near-term growth through cross-selling, complementary branch and channel networks, and expanded global reach for established businesses. The new company will also benefit by combining innovation capabilities and pipelines involving new products, advanced solutions for smart buildings and cities, value-added services driven by advanced data and analytics and connectivity between buildings and energy storage through infrastructure integration. As a result, the new company will be able to better partner with its customers to help improve their overall performance and operations, enhancing the experience for their own customers in areas such as comfort, safety and accessibility. In addition, the combined company will have one of the largest energy storage platforms with capabilities including traditional lead acid as well as advanced lithium ion battery technology serving the global energy storage market. Johnson Controls is in the midst of a strategic transformation to become a top-quartile multi-industrial company with leadership in attractive spaces connected to core growth platforms in buildings and energy storage. This focus has resulted in significant portfolio changes over the past few years including the divestiture of its Automotive Electronics and Interiors and Global Workplace Solutions businesses, as well as the acquisition of Air Distribution Technologies and the formation of Johnson Controls - Hitachi joint venture. The company announced in July 2015 that it is planning to spin off Adient at the beginning of fiscal year 2017. The combined companies, to be known as Johnson Controls plc, will maintainTyco's Irish legal domicile and remain headquarted in Cork, Ireland Tyco has transformed from a diversified holding company to a streamlined operating company with a focused and leading portfolio in fire and security that will complement Johnson Controls' buildings platform. Tyco combines best-in-class products with a world-class installation and service capability delivered across a global network of branches. The company's core strengths include security and fire systems integration, commercial security monitoring, as well as fire, security and life-safety products. Value Creation For Both Companies' Shareholders Pro forma for the transaction and separation of Adient, Johnson Controls is expected to have approximately $32 billion of revenue in fiscal year 2016 and $4.5 billion of EBITDA before synergies. Adient is expected to have approximately $16.6 billion of revenue in fiscal year 2016 and $1.6 billion of EBITDA. In addition, Adient is expected to distribute between $2.5 to $3.5 billion to Johnson Controls in conjunction with the spin-off. The new company expects to deliver at least $500 million in operational synergies over the first three years after closing. These annual cost synergies are expected to be achieved by increasing efficiencies, eliminating redundancies, integrating the global branch networks, and leveraging the combined scale of an over $20 billion buildings business platform. In addition, the transaction is expected to create at least $150 million in annual tax synergies. Johnson Controls shareholders will own approximately 56 percent of the equity of the combined company and receive aggregate cash consideration of approximately $3.9 billion. Tyco shareholders will own approximately 44 percent of the equity of the combined company. The exchange ratio represents a 13 percent premium to Tyco shareholders based on 30-day volume-weighted average prices and an 11 percent premium based on share prices as of the close of market on Jan. 22, 2016, assuming that each share of the combined company has a value equal to one Johnson Controls share. Given their ownership of the combined company, both Tyco and Johnson Controls shareholders will participate in the substantial value-creation opportunities presented by $650 million in synergies, plus incremental upside from revenue growth acceleration. Post-transaction, the combined company expects to maintain a strong investment grade credit rating and continue to pursue a balanced capital allocation program including a strong and growing dividend, consistent return of capital, and value-creating investment. Alex Molinaroli will be the chairmanand CEO of the combined company.George Oliver will serve as presidentand COO and serve as a director onthe new board, with responsibility forthe operating businesses and leadingthe integration Both Johnson Controls and Tyco shareholders will receive shares of Adient (Johnson Controls Automotive Experience) which will be distributed after the merger. The Adient spin-off is expected to occur at the beginning of fiscal 2017. Transaction Details Immediately prior to the merger, Tyco will effect a reverse stock split so that Tyco shareholders will receive a fixed exchange ratio of 0.9550 shares for each of their existing Tyco shares. Johnson Controls shareholders may elect to receive either one share of the combined company for each of their Johnson Controls shares or cash equal to $34.88 per share, which represents Johnson Controls' five-day volume-weighted average share price. Elections by Johnson Controls shareholders are subject to proration such that an aggregate of approximately $3.9 billion cash is paid in the merger. The combination will be tax-free to Tyco shareholders, and taxable to Johnson Controls shareholders. Tyco has secured a committed $4.0 billion bank facility to finance the cash consideration of the transaction. The completion of the transaction, which is expected by the end of fiscal year 2016, is subject to customary closing conditions, including regulatory approvals and approval by both Johnson Controls and Tyco shareholders. Governance And Leadership Following closing of the transaction, the board of directors of the combined company is expected to have 11 directors, consisting of six directors from Johnson Controls and five directors from Tyco. Alex Molinaroli will be the chairman and chief executive officer (CEO) of the combined company. George Oliver will serve as president and chief operating officer and serve as a director on the new board, with responsibility for the operating businesses and leading the integration. Mr. Molinaroli will serve as chairman and CEO for a term of 18 months after the closing. At that time, Mr. Oliver will become CEO and Mr. Molinaroli will become executive chair for one year, after which Mr. Oliver will become chairman and CEO. Centerview Partners is serving as Johnson Controls' lead financial advisor. Barclays is serving as financial advisor for Johnson Controls. Wachtell, Lipton, Rosen & Katz and A&L Goodbody are acting as its legal advisors. Lazard is serving as Tyco's lead financial advisor. Citi is providing the committed financing for the transaction and Goldman Sachs is serving as financial advisor for Tyco. Simpson Thacher & Bartlett and Arthur Cox are acting as its legal advisors. Fiscal Q1 Earnings Update As part of today's announcement, both companies provided preliminary 2016 first fiscal quarter earnings results. Johnson Controls said its adjusted earnings per share for the first fiscal quarter is expected to be $0.82, compared with guidance of $0.80 - $0.83. Tyco's earnings per share before special items is expected to be $0.42 versus guidance of $0.40. Johnson Controls will report earnings on Jan. 28, 2016. Tyco will report on Jan. 29, 2016.