PEMBROKE, Bermuda, June 7 /PRNewswire-FirstCall/ -- The Board of Directors of Tyco International Ltd. (NYSE: TYC; BSX: TYC) today formally approved the spin-offs of its healthcare and electronics businesses through a tax-free dividend distribution to Tyco International shareholders. The distributions will be made on June 29, 2007 (the distribution date) to shareholders of record on June 18, 2007 (the record date). "We are very pleased to reach this important milestone in the separation of Tyco International into three independent, publicly traded companies," said Tyco Chairman and Chief Executive Officer Edward Breen. "We are now in the final stages of completing this complex transaction which will provide these businesses with the focus and flexibility to achieve their long-term growth potential." In connection with the dividend distribution, each Tyco International shareholder will receive one common share of Covidien Ltd. and one common share of Tyco Electronics for every four common shares of Tyco International held at the close of business on the record date. Fractional common shares of Covidien or Tyco Electronics or Covidien will not be distributed and any Tyco International shareholder entitled to receive a fractional share will instead receive a cash payment. Immediately following the distributions, Tyco International's shareholders will own 100% of the common shares of Covidien and Tyco Electronics. The distributions have been structured to qualify as tax-free dividends to Tyco International shareholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will be taxable. Shareholders are urged to consult with their tax advisor as to the specific tax consequences of the distribution to such shareholder. Tyco International currently has approximately 2 billion shares outstanding. Based on the distribution ratio noted above, approximately 500 million shares of Tyco Electronics common stock and 500 million shares of Covidien common stock will be distributed to Tyco International shareholders. The Tyco International Board also approved a one-for-four reverse split which will become effectively immediately following the completion of the dividend distribution. Tyco's shareholders authorized the Board to implement the reverse stock split at a special shareholder meeting on March 8, 2007. Immediately following the distribution, every four common shares of Tyco International will be converted into one common share of Tyco International. As a result, Tyco International will have approximately 500 million common shares outstanding after the reverse stock split. A letter of transmittal relating to the reverse stock split will be mailed to holders of certificates representing Tyco common shares once the reverse split is effective. These holders will ultimately receive their replacement shares in book-entry form and a cash payment for any fractional share. Common shares of Tyco International will continue to trade "regular way" (inclusive of the Covidien and Tyco Electronics dividend distributions) throughout the period leading up to and including the distribution date. Any holder of Tyco International common shares who sell such shares "regular way" on or before June 29, 2007 will also be selling their entitlement to receive common shares of Covidien or Tyco Electronics in respect of such shares. Investors are encouraged to consult with their financial advisors regarding the specific consequences of selling Tyco International common stock on or before the distribution date. Tyco Electronics and Covidien have filed applications to list their common stock on the New York Stock Exchange and the Bermuda Stock Exchange under the trading symbols "TEL" and "COV" respectively. Tyco International has been advised by the NYSE that shares of Tyco International, Tyco Electronics and Covidien will trade on a "when issued" basis on or about two business days prior to the record date. Tyco International "when issued" trades will settle after the distribution date without the benefit of the Tyco Electronics and Covidien distributions. Tyco Electronics and Covidien "when issued" trades will settle after the distribution date with shares of both as standalone companies. No action is required by Tyco International shareholders to receive their Covidien or Tyco Electronics common shares. Tyco International shareholders who hold Tyco International common shares as of the record date will receive a book-entry account statement reflecting their ownership of Covidien and Tyco Electronics common shares or their brokerage account will be credited for the shares. Information Statement Shortly after June 18, 2007, Tyco International will mail Information Statements to its shareholders of record as of the close of business on the record date. The Information Statements will include information regarding the distributions and the business and management of Covidien and Tyco Electronics, respectively, following the distributions. In addition, each of Covidien and Tyco Electronics intend to file important information related to the spin-offs, including their respective Information Statements, with the U.S. Securities and Exchange Commission ("SEC") on Form 8-K. The distribution of Covidien and Tyco Electronics common shares will be made as described in the applicable Information Statements relating to such securities, which have been filed with the SEC. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of these securities in any state in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities law of any such state. About the Businesses The three businesses being created through the separation are: Tyco International Ltd. (NYSE: TYC) is a leading provider of security products and services, fire protection and detection products and services, flow control products, as well as electrical and metal conduit and construction materials. The company had 2006 revenues of more than $18 billion and employs 115,000 people in more than 60 countries. Covidien, formerly Tyco Healthcare, is a global $10 billion manufacturer of leading medical devices and supplies, imaging products and pharmaceuticals. The Company employs more than 43,000 people worldwide and is dedicated to working with medical professionals to improve patient outcomes. Its portfolio of leading brands includes Autosuture, Kendall, Mallinckrodt, Nellcor, Puritan Bennett, Syneture and Valleylab. Tyco Electronics is a leading global provider of engineered electronic components, network solutions and wireless systems, with 2006 sales of $12.8 billion to customers in more than 150 countries. The company designs, manufactures and markets products for customers in industries from automotive, appliances and aerospace and defense to telecommunications, computers and consumer electronics. Forward-Looking Statements This release may contain certain forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. The forward- looking statements in this release include statements addressing the following subjects: future financial condition and operating results. Economic, business, competitive and/or regulatory factors affecting Tyco's businesses are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. Tyco is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. More detailed information about these and other factors is set forth in Tyco's Annual Report on Form 10-K and 10-K/A for the fiscal year ended Sept. 29, 2006 and in Tyco's Quarterly Report on Form 10-Q and for the fiscal quarter ended March 30, 2007.
SOURCE Tyco International Ltd.