Within a year Tyco plans to break its security, fire-protection, and flow-control segments into three publicly traded companies.
This is the second time Tyco will break itself up into smaller companies. The last split came in 2007 when the company’s medical and electrical divisions became their own entities.
According to the company, the break-up is happening because each division is strong enough to stand on its own and be better able to zero in on its distinct market. The announcement is the fourth such announcement by a major corporation this year. Food giant Sara Lee, ITT, and Marathon Oil all have broken their companies into smaller parts and reaped rich rewards this year. Tyco expects its spinoffs to initially be as valuable apart as they are together.
The announcement of the breakup earlier this month puts to rest a growing swirl of rumors that the company would be sold to one of its chief rivals, perhaps Schneider Electric in France or United Technologies Corp. Whether the individual companies would be acquired is not yet known.
Edward Breen, the chairman and CEO of Tyco International at 9 Roszel Road, will become the chairman of the commercial fire and security company. He also will be a director of the flow-control company and a consultant to the ADT North America residential security company.
Paul Fitzhenry, a spokesman for Tyco, said that when the separation is completed, “the executive offices for the $10 billion Commercial Fire and Security business will be in Princeton at our current location.”
#b#Tyco International Ltd. (TYC)#/b#, 9 Roszel Road, Princeton 08540; 609-720-4200; fax, 609-720-4208. Edward Breen, chairman and CEO. www.tyco.com