Johnson Controls to Merge with Tyco, Locate Headquarters in Ireland

Jan 25, 2016

Leaders of both companies say the combined venture will retain the Johnson Controls name. While they will base their new corporate headquarters in Cork, Ireland for tax purposes, Milwaukee will house the new firm's North American offices. 

Johnson Controls has been based here for more than 100 years. It is the state's largest publicly-traded company.

Johnson Controls specializes in energy control and storage; Tyco makes security and fire alarm systems. Together, they say they will create a world leader in building technology.

Veteran Milwaukee business Reporter Rich Rovito says given Johnson Controls' deep roots in the community, he doesn't think the impact here will be extremely negative.

"But you've got to worry in these situations - there are always layoffs with mergers. I've never seen a merger where there weren't layoffs - they use the word synergies. The companies have said that they expect $650 million in synergies from this deal." Rovito says.

Rovito says other recent mergers in town offered promises early on but cost jobs in the end, such as brewing companies Miller and Coors, airlines Midwest and Frontier, and mining equipment makers Bucyrus and Caterpillar.

"These usually happen because there is some financial reason to do this. You take two like-minded companies, bring them together and then you get these so-called synergies," Rovito says.

Regarding the Johnson Controls - Tyco merger, Rovito says the deal could offer more than cost-cutting opportunities.

"Maybe there will be some sort of distribution channels that will be more efficient now. Tyco may bring some product lines to complement what Johnson Control does. It's possibly a good time for (merger and acquisition) deals right now. There's a lot of factors that usually come into play but usually always driven by some sort of financial outcome," Rovito says.

Johnson Controls' Alex Molinaroli will be the chairman and chief executive officer (CEO) of the combined company.