Johnson Controls had recently announced that the company will be merging with Tyco, a global firm based in Ireland that specializes in fire and security solutions. After the merger, the combined company will have USD $32 billion in revenues, and the shareholders of will have a 56% equity stake in the combined company, with Tyco owning the balance 44 per cent. Johnson Control shareholder will also receive cash amounting to USD 3.9 billion. The CEOs of both companies will alternate at the helm of the merged entity for periods of 18 months each, with Molinari taking up the first stint.
The shareholders of Johnson Controls have formally approved the merger with 97 per cent of the votes cast at a special meeting to discuss the issue being in favor of the merger. Tyco’s shareholders have already approved the merger.
With the merger, the new company will be one of the leading companies in the world in the energy and building sectors and will save a considerable amount when it comes to taxes and as a result of synergies between the two companies. The merger will also help both companies to enter new markets. For example, Tyco is strong in the Euopean market while Johnson Controls experienced has an automotive experience unit in China which had revenues to the tune of USD 344 million. The merger will also make it easier for both companies to transition to the Internet of Things (IoT) ecosystem.
Commenting on the approval from the shareholders, Alex Molinaroli, chairman and CEO of Johnson Controls, expressed his pleasure that the company’s shareholders voted in favor of the merger which will unite two world-class companies with complementary capabilities. He added, “I am excited and enthusiastic as we create the world leader in buildings and energy systems with a strong leadership team and dedicated employees around the world ready to deliver on the promise of smarter cities and communities.”
The merger has proceeded despite objections from the US Department of Justice to takeovers of American multinational corporations by companies based in low-tax regimes. The merger with Tyco is expected to be complete on Sept. 2.
Hamid Moaref has always been fascinated by cars and the automotive industry. His family has a longstanding association with the industry and has been in the tire business for the past 35 years. Raised in Dubai, Hamid attended Capilano University in Vancouver where he graduated with a BBA in marketing before attending an intensive course in magazine publishing in 2005. He has been the publisher and chief editor of Tires & Parts magazine for the past ten years.
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