Breen said the three companies will provide exciting opportunities for Tyco's employees. "I want to thank our outstanding employees for the extraordinary work they have done to get us to this point," he said. "I'm confident that their talent and hard work will allow each of our three standalone businesses to reach its full potential."
It is anticipated that all three companies will be capitalized to provide the financial flexibility to take advantage of future growth opportunities. They are expected to have strong balance sheets and investment grade credit ratings. Any existing or potential liabilities that are not associated with a particular entity will be allocated appropriately to each of the businesses.
The three entities together are initially expected to pay a dividend that is approximately equal in sum to the current Tyco dividend. Until the planned transactions are completed, Tyco expects to continue to pay its quarterly dividend.
One-time transaction costs are expected to total approximately $700 million -- largely for debt refinancing, separation and restructuring costs. It is expected that these costs will be partially offset by lower future interest expense and other operational benefits. Under the proposed transaction structure, the ADT North America residential business is expected to be incorporated in the United States, while the flow control business will be incorporated outside the U.S. The commercial fire and security business will remain incorporated in Switzerland.
Consummation of the proposed separation is subject to conditions including final approval by the Tyco Board of Directors, receipt of a tax opinion from counsel, the filing and effectiveness of registration statements with the U.S. Securities and Exchange Commission, and approval by Tyco shareholders. The separation is also subject to the completion of any necessary refinancings. There can be no assurances regarding the ultimate timing of the transaction or that the transaction will be completed.
Tyco International Ltd.
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