What Will Be Johnson Controls’ Revenue Composition Post The Tyco Merger?

+0.92%
Upside
64.40
Market
64.99
Trefis
JCI: Johnson Controls logo
JCI
Johnson Controls

Before Tyco Merger and Adient Spinoff:

Screen Shot 2016-05-23 at 5.11.20 pm

 

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After Tyco Merger and Adient Spinoff:

Screen Shot 2016-05-23 at 5.11.26 pm

While Johnson Controls (NYSE:JCI) is a global leader in building controls, HVAC equipment, and energy storage technology, Tyco is a global leader in fire and security. The new company hopes to bring together complementary businesses to capitalize on the transitioning of the home-products industry into a new world characterized by smart, connected products, referred to as the ‘Internet of Things” (IoT). The two firms are building a business that possesses every facet of the so-called smart building, wherein everything from the air conditioning to light bulbs is connected to the internet, with data being used for energy efficiency and productivity gains. JCI’s product offerings and development include IoT connectivity for smart buildings, campuses, and cities, and it is here that JCI will be able to take advantage of Tyco’s complementary business. The main purpose of the merger seems to be gaining size in its area of focus, which is becoming a colossus in the building controls and equipment market. The new company will be able to witness immediate opportunities for growth, through cross-selling of products, complementary distribution networks, and a widened global reach.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Johnson Controls.

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