January 27, 2016

What does the Johnson Controls-Tyco International merger mean for their competition?

Smart building technology is the future of energy, security and sensor industries.

Johnson Controls, an international technology and industrial leader in energy, sensors and air conditioning, and Tyco International, a global provider of fire protection, security products and services, recently agreed to merge, creating a massive organization under the Johnson Controls name with an estimated $32 billion in yearly profits.

As part of the agreements from the deal, Tomi Kilgore reported that any Johnson Controls shareholders will hold 56 percent of the new company and may also earn $3.90 in cash considerations. This combined business seeks to draw from both of its predecessor's skills and use them to compete more effectively in the increasingly competitive marketplace, with giants such as GE and Emerson.

Many of the company's competitors are investing millions in cloud-based computing software and other innovative technologies, making it difficult for Johnson Controls to effectively dominate the smart building industry.

In light of this, Stacey Higginbotham at Fortune proposed three questions. 

"The new Johnson Controls should invest in more analytics and expertise to make sure it can take the data it has and build the best algorithms for its customers … Perhaps we'll see it become a target of a larger IT firm, or for the already debt-laden Johnson Controls attempt its own cloud and IT acquisitions," Higginbotham explained

With the help of an M&A expert, your organization can ensure that its deal meets its projected growth needs and desires. Contact us today to see how your company can benefit from a partnership with our skilled team of professionals.