Four!: Tyco Announces Money-Saving/Making Plan

Compiled ByTraci Purdum In an effort to eliminate $11 billion in debt and "unlock tens of billions of dollars of shareholder value," Tyco International Ltd. is separating into four independent, publicly traded companies: security and electronics, healthcare, fire protection and flow control, and financial services. Under the plan, Tyco's healthcare, fire protection and flow control, and financial services business will be taken public through IPOs and then distributed to Tyco shareholders. The security and electronics businesses will be combined as a fourth publicly traded company. Tyco Plastics, one of the U.S.' largest manufacturers of plastic film and other plastic products, will be sold. Tyco plans to use the proceeds from the IPOs and the sale of the plastics business to eliminate at least $11 billion of debt. Dennis Kozlowski, chairman and CEO of the Pembroke, Bermuda-based company, outlined the move Jan. 22. "The plan . . . is designed to close that gap -- the gap between Tyco's market value in recent years and the value of our businesses. Our objective has always been to deliver value to our shareholders. That is why we are taking this action today and why we are all very excited about the future." According to the company, the first IPO -- Tyco Capital -- will be completed in the second quarter of 2002. The remaining IPOs should be completed by the end of calendar 2002. All four companies will remain based in Bermuda.