Monday's announcement of a merger agreement between Tyco International (NYSE:TYC)
and Johnson Controls Inc (NYSE:JCI)
brings different things to each set of investors. Adding Tyco's fire and security systems to Johnson Controls' heating, ventilation, and air conditioning, or HVAC, solutions will create a leading player in the commercial building-products marketplace. However, Johnson Controls also contains a Power Solutions and Automotive Experience business (car batteries, and car seating and interiors, respectively) that Tyco investors will now be invested in. Let's take a closer look at the deal and what it means to both sets of investors.
You can think of the process in two stages. First, Tyco and Johnson Controls will merge, with Tyco investors owning around 44% of the combined entity, to be called Johnson Controls plc, with current Johnson Controls investors owning the remaining 56%.