Lucent Technologies Sells Power Systems Business to Tyco International
Lucent Technologies (Murray Hill, NJ) announced that it has agreed to sell its Power Systems business unit (LPS) to Tyco International (Pembroke, Bermuda) for $2.5 billion. The sale, which is subject to regulatory approval and other customary closing conditions, is expected to close by December 31, 2000, and result in a one-time gain to be recorded as an extraordinary item, net of tax, on Lucent's income statement. LPS will become part of Tyco Electronics.
"As Lucent focuses on the broadband and mobile Internet markets, we recognized that the Power Systems business, and its employees, will be best positioned for future success in a company serving the electronics and power industries," said Bill O'Shea, executive vice president of corporate strategy and business development at Lucent Technologies. "Our goal was to find the right buyer, and we are very pleased that Tyco recognized the value of LPS and its talented people. We look forward to an ongoing relationship with Tyco and Power Systems."
Tyco International, a $29.0 billion company, has agreed to a three-year benchmarked supply agreement with LPS. L. Dennis Kozlowski, chairman and CEO of Tyco International, stated, "We expect that the acquisition of LPS, like previous acquisitions, will be immediately accretive to Tyco's earnings. The acquisition is an excellent fit for Tyco. It provides a link between Tyco Electronics' electronic components and TyCom's communications networks. This is part of an evolution of Tyco Electronics to a systems provider as well as a components supplier."
Kozlowski further commented, "This acquisition provides Tyco Electronics with the world-class engineering, manufacturing and product-development resources of Lucent's Power Systems business. The expertise of LPS' engineers and researchers will contribute to product development and customer solutions throughout Tyco Electronics."