Johnson Controls Inc. will merge with Tyco, a fire protection and security provider, to create a company with a range of building products and energy storage capabilities, the companies announced Jan. 25.
JCI is continuing with its plan to spin off its automotive interiors business, creating a new company called Adient that will include its interiors joint venture with China's Yanfeng Automotive Trim Systems Co. Ltd. After the spin-off, to launch officially in October, JCI will retain its building efficiency unit and battery manufacturing operations, which includes molded plastic cases for more than 150 million units per year.
Those operations align with Tyco's strengths, JCI Chairman and CEO Alex Molinaroli said in a statement.
“The proposed combination of Johnson Controls and Tyco represents the next phase of our transformation to become a leading global multi-industrial company,” Molinaroli said. “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.”
The combined company will pursue opportunities in cross-selling and the demand for “smart” buildings and cities and energy storage through infrastructure integration, a news release indicates.
“We believe this transaction will allow us to better capture opportunities created by increased connectivity in homes, buildings and cities,” Tyco CEO George Oliver said in a statement. “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.”
The combined company, to be named Johnson Controls plc, is expected to operate global headquarters in Tyco's home of Cork, Ireland, which offers lower corporate tax rates. The company's North American operations will based near Milwaukee, where JCI is currently headquartered.
Molinaroli will serve as chairman and CEO of the combined company, with Tyco's Oliver as president and chief operating officer for the first 18 months after the deal closes. At the end of that period, Oliver will move into the CEO role and Molinaroli will become chairman for one year, after which Oliver will become chairman and CEO.
The combined company is expected to generate about $32 billion a year in sales. Both JCI and Tyco shareholders will receive shares of Adient, which will be distributed after the merger.