Bermuda-based Tyco International Ltd on Friday announced that its Board of Directors has approved a plan to separate the company’s current portfolio of businesses into three separate, publicly traded companies – Tyco Healthcare, Tyco Electronics, and the combination of Tyco Fire & Security and Engineered Products & Services.
The company intends to accomplish the separation through tax-free stock dividends to Tyco shareholders, after which they will own 100% of the equity in three publicly traded companies. Each company will have its own independent Board of Directors.
Tyco expects to complete the transactions during the first quarter of 2007.
Commenting on the move, Tyco Chairman and Chief Executive Officer Ed Breen announced that:
“After a thorough review of strategic options with our Board of Directors, we have determined that separating into three independent companies is the best approach to enable these businesses to achieve their full potential. Healthcare, Electronics and TFS/TEPS will be able to move faster and more aggressively - and ultimately create more value for our shareholders - by pursuing their own growth strategies as independent companies.”
Tyco shares dropped on the announcement, which had been expected but was accompanied by reduced earnings guidance numbers.
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