MDT Medtronic PLC

   (FROM THE WALL STREET JOURNAL 1/20/16) 
   By Bob Tita 

Tyco International PLC said it reached a tentative settlement with the U.S. Internal Revenue Service that would require Tyco and two businesses it spun off in 2007 to pay as much as $525 million in total claims for back taxes.

The settlement, disclosed Tuesday in a regulatory filing, is far less than the $1 billion to $1.3 billion in taxes and penalties projected by some analysts. Tyco, TE Connectivity Ltd. and Covidien PLC, which was acquired last year by Medtronic PLC, would pay the IRS between $475 million and $525 million.

Tyco, which makes fire suppression and security equipment for commercial building, would pay 27% of the settlement amount, or roughly $128 million to $142 million. TE Connectivity, which manufacturers electronic components, and Medtronic, a medical-device maker, would be responsible for 31% and 42% of the settlement, respectively.

Tyco spun off TE Connectivity and Covidien as stand-alone public companies as part of a decadelong dismantling of its business portfolio. The industrial conglomerate also spun off home-security service ADT Corp. and sold its industrial pipes and valves business in 2012 to Pentair PLC.

Tyco, which is based in Ireland, said neither ADT nor Pentair would be liable for a share of the settlement, under an earlier agreement between Tyco and the IRS.

The settlement is subject to the approval of the IRS Appeals Division and the U.S. Tax Court. Tyco's portion of the settlement would be covered by $215 million that the company previously set aside. Tyco said it expects to pay its share of the settlement in the next six months.

(END) Dow Jones Newswires

January 20, 2016 02:47 ET (07:47 GMT)

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