MILWAUKEE -Shareholders of Johnson Controls (NYSE: JCI) and Tyco Int’l voted on Wednesday to approve the merger of the two companies, a $20 billion deal that was first announced in January. The transaction is expected to be finalized Sept. 2.
More than 80% of JCI shareholders voted in favor of the merger, which needed to be approved by a two-thirds majority. Tyco shareholders also overwhelmingly approved the deal, which will create a combined company with $30 billion in annual sales specializing in building systems and products, as well as battery and energy storage systems for vehicles and buildings.
“I am pleased our shareholders have voted in favor of this powerful strategic combination, which will unite two world-class companies with complementary capabilities,” said Alex Molinaroli, chairman and CEO of Johnson Controls, in a prepared statement. “I am excited and enthusiastic as we create the world leader in buildings and energy systems with a strong leadership team and dedicated employees around the world ready to deliver on the promise of smarter cities and communities.”
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The merger will allow JCI to move its official base of operations to Ireland, in the process skirting America’s steep 35% federal corporate tax rate in a controversial tax-shifting maneuver known as an inversion. JCI has said it expects savings of $150 million a year on its taxes as a result of the deal.
With its main headquarters to be based in Cork, Ire., JCI will continue to be managed from Milwaukee, which will be the North American operating headquarters of the company.
Under terms of the deal, JCI will have a majority of the board of directors and the top management team. Molinaroli will lead the merged company as chairman and CEO, with Tyco CEO George Oliver to begin his tenure as president and COO.
Oliver will assume the role of CEO after one year, and add the chairman title when Molinaroli retires in March 2018, according to the company.
“We are excited about combining the vast capabilities of Johnson Controls and Tyco to help customers improve their safety, performance and operations,” Oliver said in a statement. “I would also like to thank our shareholders for their confidence and investment in the company over the years and for their support of our vision with their approval of this merger.”
