TYCO INTL. ACQUIRES THE CIT GROUP IN TAX-FREE STOCK EXCHANGE
Tyco Intl. Ltd., a diversified manufacturing and service company, and The CIT Group Inc., the largest independent commercial finance company, announce they have entered into a definitive agreement in which Tyco will acquire CIT in a tax-free stock-for-stock exchange.
CIT shareholders will receive approximately 0.7 Tyco shares for each share of CIT. The transaction is valued at $35.02 per share to CIT shareholders, or approximately $9.2 billion, based on Tyco’s March 12 closing price on the New York Stock Exchange of $50.70 per share. The transaction will be immediately accretive to Tyco earnings.
Tyco has also entered into a purchase agreement with The Dai-Ichi Kangyo Bank Ltd. for its approximate 71 million shares of CIT (which constitutes approximately 27 percent of the outstanding shares) for $35.02 in cash per share. “For years, our operating managers have advocated creating a financing capability within Tyco to support the growth of our businesses,” says L. Dennis Kozlowski, Tyco chairman and CEO. “After evaluating several paths to this goal, we concluded that acquiring CTI gives us a faster, more efficient and robust solution at lower risk than anything we might have done internally or through joint-venture or other approaches.” Albert Gamper Jr., CIT chairman, president and CEO, adds, “This transaction provides exceptional value for our shareholders and allows CIT shareholders to participate in the future growth of Tyco.”
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