Tyco International PLC (TYC) filed a Form 8K - Entry Into a
Definitive Agreement - with the U.S Securities and Exchange
Commission on January 27, 2016.
Merger Agreement
On January 24, 2016, Tyco International plc, an Irish public
limited company ("Tyco"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Johnson Controls, Inc., a
Wisconsin corporation ("JCI"), and certain other parties named
therein, including Jagara Merger Sub LLC, a Wisconsin limited
liability company and indirect wholly owned subsidiary of Tyco
("Merger Sub"). Pursuant to the Merger Agreement and subject to the
terms and conditions set forth therein, Merger Sub will merge with
and into JCI (the "Merger"), with JCI surviving the Merger as an
indirect wholly owned subsidiary of Tyco. At the effective time of
the Merger, Tyco will change its name to "Johnson Controls plc" and
will trade under the ticker symbol "JCI." We refer to Tyco
following such time as the "Combined Company."
As a result of the Merger, each outstanding share of JCI common
stock (the "JCI Shares"), other than shares held by JCI, its
subsidiaries, Tyco or Merger Sub, will be converted into the right
to receive (subject to proration as described below), at the
holder's election, either: (i) one (1) (the "Exchange Ratio")
ordinary share of the Combined Company (the "Share Consideration");
or (ii) an amount in cash equal to $34.88 (the "Cash
Consideration"). Elections will be prorated so that JCI
shareholders will receive in the aggregate approximately $3.864
billion of cash in the Merger (the "Aggregate Cash Consideration").
Holders that do not make an election will be treated as having
elected to receive the Share Consideration. The Exchange Ratio
takes into account the effects of a Tyco share consolidation
contemplated by the Merger Agreement whereby, immediately prior to
the Merger, every issued and unissued ordinary share of Tyco (each,
a "Tyco Share") will be consolidated into 0.955 of a share of
Tyco.
Each outstanding award granted under JCI's equity-based
compensation plans denominated with respect to JCI Shares will be
converted into an award of the same type and equivalent value
denominated with respect to shares of the Combined Company. Such
converted awards generally will be subject to the same terms and
conditions as applied to the corresponding awards immediately prior
to consummation of the Merger. Each outstanding award granted under
Tyco's equity-based compensation plans denominated with respect to
a Tyco Share will be equitably adjusted in connection with the Tyco
share consolidation.
The completion of the Merger is subject to certain closing
conditions, including, among others, (i) the approval and adoption
of the Merger Agreement by holders of two-thirds of the JCI Shares
entitled to vote on such matter, (ii) the approval by the Tyco
shareholders, at a special meeting of the Tyco shareholders (the
"Tyco Special Meeting") of (A) the issuance of Tyco shares in
connection with the Merger, (B) the Tyco share consolidation and
(C) the increase in Tyco's authorized share capital, in each case,
by a majority of the votes cast on these matters at the Tyco
Special Meeting, and of certain amendments to Tyco's articles of
association, including a change of its name to "Johnson Controls
plc," by at least 75% of the votes cast on these matters at the
Tyco Special Meeting (clause (ii), collectively, the "Tyco
Shareholder Approvals"), (iii) the expiration or termination of any
waiting period applicable to the Merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, the consent of, or
filing with, certain specified antitrust authorities, and certain
other customary regulatory approvals, and (iv) Tyco's obtaining the
financing required to close the Merger on the terms set forth in
the Merger Agreement.
The Merger Agreement contains representations and warranties
that expire at the effective time of the Merger, as well as
covenants, including covenants providing for each of the parties
and their subsidiaries to conduct their business in all material
respects in the ordinary course during the period between the
execution of the Merger Agreement and the effective time of the
Merger and to use reasonable best efforts to cause the Merger to be
consummated. The Merger Agreement also includes covenants requiring
each of Tyco and JCI not to solicit, initiate or knowingly
encourage any inquiries, proposals or offers relating to
alternative business combination transactions or, subject to
certain exceptions, engage in any discussions or negotiations with
respect thereto or furnish any nonpublic information in furtherance
thereof. The Merger Agreement also requires each of Tyco and JCI to
call and hold a special meeting of shareholders, and, subject to
certain limited exceptions, requires Tyco's board of directors to
recommend the Tyco Shareholder Approvals and JCI's board of
directors to recommend the approval of the Merger Agreement at such
meetings. Either party's board of directors is also permitted to
change its recommendation in response to a "superior proposal" or
an "intervening event" (as defined with respect to Tyco or JCI, as
applicable, in the Merger Agreement).
The Merger Agreement contains specified termination rights,
including, among others, the right of either party to terminate the
Merger Agreement (i) if the requisite shareholder approvals have
not been obtained, (ii) if the board of directors of the other
party effects a change of recommendation, (iii) if the closing has
not occurred by October 24, 2016, subject to extension to January
24, 2017 in certain circumstances, (iv) in response to certain
intervening events (subject to the limitations set forth in the
Merger Agreement) or (v) if there is a material breach by the other
party of any of its representations, warranties or covenants,
subject to certain conditions.
The Merger Agreement provides, among other things, that a fee is
payable if the Merger Agreement is terminated in the following
circumstances: (i) if a party willfully breaches its
non-solicitation obligations or its obligation to call a special
meeting of its shareholders and the other party's board of
directors confirms that it does not intend to change its
recommendation, the party that willfully breached such obligations
must pay, following a termination by the other party of the Merger
Agreement, a termination fee of $375 million; (ii) if a party's
board of directors effects a change of recommendation in response
to a "superior proposal" or an "intervening event" that is not a
change or proposed change in law, and the other party's board of
directors confirms that it does not intend to change its
recommendation, the party whose board of directors changed its
recommendation must pay, following a termination by the other party
of the Merger Agreement, a termination fee of $375 million; (iii)
if one party's board of directors effects a change of
recommendation in response to an "intervening event" that is a
change or proposed change in law and the other party's board of
directors confirms that it does not intend to change its
recommendation, the party whose board of directors changed its
recommendation must pay, following a termination by the other party
of the Merger Agreement, a termination fee of $500 million; (iv) if
a party terminates the agreement in response to an "intervening
event" that is a change or proposed change in law and the other
party's board of directors confirms that its board has determined
that the transaction continues to be in the interests of the other
party's shareholders, the party that terminates the Merger
Agreement must pay a termination fee of $500 million; (v) if a
party receives a competing proposal, that party's shareholders
subsequently vote down the transaction, and that party consummates
or enters into a definitive agreement providing for a competing
proposal within 12 months, such party must pay a termination fee of
$375 million; and (vi) if a party's shareholders vote down the
transaction and the other party's shareholders approve the
transaction (and neither party's board of directors changes its
recommendation), the party whose shareholders voted down the
transaction must reimburse the other party's expenses up to a cap
equal to $35 million plus, in the case of payment to Tyco, up to
$65 million of financing costs.
At the effective time of the Merger, the board of directors of
the Combined Company will consist of eleven directors, six of whom
will be directors of the JCI board of directors prior to the
closing and five of whom will be directors of the Tyco board of
directors prior to the closing. The eleven directors of the
Combined Company will include the current Chief Executive Officer
of JCI, the current Chief Executive Officer of Tyco, and nine other
directors to be mutually agreed between JCI and Tyco.
...This item was truncated.
The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/833444/000119312516439970/d86179d8k.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/833444/000119312516439970/0001193125-16-439970-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
(END) Dow Jones Newswires
January 27, 2016 17:21 ET (22:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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