
Tyco (TYC) Stock Soars on Johnson Controls Merger
NEW YORK (TheStreet) -- Tyco Int'l (TYC) stock is up by 7.52% to $32.90 in pre-market trading on Monday, after the Irish fire and security provider announced it will merge with JohnsonControls (JCI).
Under the terms of the deal, Tyco shareholders will hold 44% of the combined company's shares, which will be based in Cork, Ireland. Johnson Control shareholders will own about 56% of the combined company's shares.
The merger is an inversion deal that will allow the Milwaukee-based Johnson Controls to take advantage of a more favorable tax status abroad, the Wall Street Journal reports.
The combined company will save $150 million annually on taxes, the companies said in a statement.
The deal is expected to close by the end of fiscal year 2016.
"We believe this transaction will allow us to better capture opportunities created by increased connectivity in homes, buildings and cities," CEO George Oliver said in a statement on Monday. "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."
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.
You can view the full analysis from the report here: TYC
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