Tyco is considering a corporate break-up that would involve spinning off its health care and electronics businesses while retaining a stripped-down company that includes only its security, fire, and valve and pumps businesses. The Wall Street Journal says Tyco’s board will vote sometime within the next week on the proposal being offered by CEO Ed Breen.
Under the plan, security and fire properties like ADT, SimplexGrinnell, Software House and DSC would form the main backbone of a slimmed-down Tyco along with Tyco properties that manufacturer industrial valves and fire sprinklers.
Unlike the diverse nature of Tyco in its current form, the new Tyco will have a large amount of its focus on its security and life safety properties if the plan is approved. Based on fiscal 2005 revenues, the fire and security division would make up 66 percent of the new Tyco.
The electronics and health care divisions that would be broken off under the plan make up 54 percent of present Tyco revenues, with electronics standing slightly ahead of fire and security as Tyco’s top revenue producer.
The Wall Street Journal says Tyco has set no firm date on when the vote will be taken.
