It was announced yesterday that the Bermuda based conglomerate, Tyco International Ltd, plans to move into the financial services market. The company, which is currently mainly associated with services and manufacture, has declared its new ambition by entering into an agreement with the CIT Group, owners of the largest factoring company by turnover in the USA, CIT Commercial Finance. This agreement will enable Tyco to acquire CIT in a tax-free stock-for-stock exchange. Negotiations have been in progress between CIT and Tyco since November.
Most sources are quoting the cost of the transaction as being roughly $9.2billion. CIT shareholders are to receive 0.6907 Tyco shares for each share of CIT, making the value of individual CIT shares $35.02.