By MIA LAMAR
Tyco International struck a deal with Pentair to merge the
maker of water treatment and storage systems with its pipes and
valves unit, valuing the business at
roughly $4.5 billion.
The deal, if approved by shareholders, would see Tyco own
roughly 52.5% of the combined company and Pentair own about
The new company is expected to take the Pentair name and be
led by Randall J. Hogan, Pentair's current chairman and chief
Shares of Pentair jumped 11% to $44.61 in premarket trade on
the report. Tyco shares were inactive from their Tuesday close
Tyco in September unveiled plans to split itself into three
publicly traded companies devoted to home security, pipes and
valves, and fire protection, putting
it among a string of large US companies that have decided the
sum of their parts is worth more than the whole.
"This transaction provides compelling value for Tyco
shareholders through ownership in a combined company with
earnings and cash flow prospects that are greater than an
independent, publicly traded Tyco Flow," Tyco CEO Ed Breen said
Tyco noted that it continues to expect to complete its full
separation plans by the end of September.
The company's fiscal first-quarter earnings reported in
January showed a 49% slump in profit as results took a hit from
costs tied to its planned separations.
Pentair has seen recent results boosted by sales in emerging
markets though it has more recently warned of higher costs and
softer-than-expected sales weakening the bottom line.
In May, the company completed its acquisition of Clean
Process Technologies for about $705 million, a move that was
expected to increase Pentair's exposure to emerging
Dow Jones Newswires