Johnson Controls to merge with Cork based Tyco

US manufacturer of car batteries will cut tax bill by $500m by acquiring Cork based protection and security company Tyco International

Johnson Controls, a US maker of car batteries and heating and ventilationequipment, said on Monday it would merge with Ireland-based fire protection and security systems maker Tyco International.

Johnson Controls’ shares were up 5.3 per cent at $37.40 in premarket trading on Monday. Tyco’s shares were up 10 per cent at $33.65.

The businesses of Johnson Controls and Tyco will be combined under Tyco International, which will be renamed Johnson Controls, after the deal closes. The combined company would be domiciled in low-tax Ireland. The deal will result in at least $500 million in savings in the first three years, and create at least $150 million in annual tax savings, the companies said.

The new company will be headed by Johnson Controls chief executive Alex Molinaroli and will continue to trade under the “JCI” ticker on the New York Stock Exchange. Johnson Controls’ shareholders will own about 56 per cent of the combined company and receive a cash consideration of about $3.9 billion, upon closure of the deal.

Centerview Partners and Barclays were financial advisers to Johnson Controls, while Lazard and Goldman Sachs advised Tyco.