News

Tyco pulls back on plans to split into divisions

April 25, 2002

FREMONT, Calif. -- Tyco International Inc. (NYSE:TYC), the parent company of touchscreen manufacturer Elo TouchSystems Inc., announced on April 25 that it was abandoning plans to split the company into four independent units.

The plan, which had been in the works for three months, was envisioned as the company's best long-term strategy for maximizing stockholder value. But Tyco Chairman and Chief Executive Officer Dennis Kozlowski said the decision had not generated the expected response on Wall Street. The company's stock closed at $20.75 on April 26, near its 52-week low of $20.49 and a far cry from its 52-week high of $60.09.

"In hindsight, the break-up plan was a mistake," Kozlowski told Reuters.

Under the plan, Elo TouchSystems probably would have been part of the largest of the four companies, which would have comprised Tyco's home security, electronic component manufacturing, and worldwide fiber optic divisions. In addition, Tyco would have created separate companies for its health care and fire protection divisions, and would have spun off a lending company that it bought in 2001.

Tyco on April 25 also announced plans to eliminate more than 7,000 jobs, slashing its work force by about 3 percent.