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. Last Updated: 07/27/2016

Tyco Buys Raychem For $3Bln




MENLO PARK, California -- Tyco International Ltd. said it will buy Raychem Corp. for about $2.87 billion in cash and stock, in a bid to strengthen its position as a leading electronics supplier to the telecommunications and automotive industries.


Raychem, a designer, manufacturer and distributor of electronic components that had 1998 revenue of $1.8 billion, said Wednesday it would merge with a subsidiary of Bermuda-based Tyco, which expects to have more than $22 billion in revenue this year.


Tyco International is a diversified manufacturing and service company with operations in more than 80 countries around the world.


It is a leader in making fire protection systems and providing electronic security services. It also makes and services electrical and electronic components and underwater telecommunications systems and makes flow-control valves, disposable medical products and plastics and adhesives.


The boards of both companies have unanimously approved the transaction.


Investors seemed to like the combination. Raychem stock shot up more than 16 percent to close at $36.25 on the New York Stock Exchange, while Tyco shares closed up more than 4 percent at $93.50 also on the NYSE.


Raychem shareholders would get about $37 a share for their stock under terms of the deal. That includes about $1.4 billion in cash and 16.1 million newly issued Tyco shares.