Tyco splits three ways

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NEW YORK - Tyco International Ltd. on Friday changed from an unwieldy conglomerate into three public companies tightly focused on health care, electronics and security products.

The tax-free distribution to shareholders occurred after 18 months of planning and delays and more than $1 billion in costs.

The spin-offs turned a scandal-plagued company with annual revenue of $41 billion into three smaller operations - each of which brings in billions of dollars on its own.

Tyco officials have said each company's streamlined operations will make it easier to focus on specific industry needs and achieve growth, and analysts agree.

"We feel that these businesses are going to prosper as separate entities," said Eric Landry, a senior analyst with Morningstar. "Our take on companies is that if the sum of the parts is not worth more than the independent parts, then those parts don't belong together. That's definitely the case with Tyco."

Tyco swelled under the management of former CEO L. Dennis Kozlowski, who stepped down in 2002 amid a widely publicized fraud investigation.

Tyco spent years coping with the scandal, and on May 15 set up an almost $3 billion fund to settle some related shareholder claims, readying it for the planned breakup.

At the markets' close Friday, each Tyco shareholder received one share of the newly spun-off health care business, Covidien Ltd., and one share of the newly formed Tyco Electronics Ltd. for every four common shares of Tyco International held at the close of business June 18.

In addition, every four common shares of the slimmed-down Tyco International were converted into one share in a reverse stock split.


The Kendall Co. bandage and wound care product facility on Marvin Griffin Road that was once part of Tyco's Healthcare Group is now part of spinoff company Covidien Ltd., based in Mansfield, Mass.

The division, which had about $10 billion in sales last year, will begin trading as Covidien under the ticker COV.

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