EXHIBIT 99.1
FOR IMMEDIATE RELEASE
(Tuesday, March 13, 2001)
CONTACTS:
Tyco International
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Investor Relations Media Relations
Jack Blackstock Maryanne Kane
Senior Vice President Corporate Press Relations
Tyco International (US) Inc. Tyco International (US) Inc.
(212) 424-1344 (508) 747-0800
The CIT Group, Inc.
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James J. Egan, Jr.
The CIT Group, Inc.
Executive Vice President
Investor Relations
(973) 535-5911
TYCO INTERNATIONAL TO ACQUIRE THE CIT GROUP
-- Acquisition Will Have Immediate Positive Impact on Earnings;
Highly Attractive Benefits Accrue to Both Companies --
-- Expands Tyco's Organic Growth Opportunities; Enhances Company's Ability to
Reduce Working Capital, Increase Cash Flow --
Pembroke, Bermuda and New York, NY, March 13, 2001 -- Tyco International Ltd.
(NYSE: TYC; LSE: TYI; BSX: TYC), a diversified manufacturing and service
company, and The CIT Group, Inc. (NYSE: CIT, TSE: CIT.U, and Exchangeable Shares
- - TSE: CGX.U), the largest independent commercial finance company, today
announced that they have entered into a definitive agreement pursuant to which
Tyco will acquire CIT in a tax-free stock-for-stock exchange.
CIT shareholders will receive 0.6907 Tyco shares for each share of CIT. The
transaction is valued at $35.02 per share to the CIT shareholders, or
approximately $9.2 billion, based on Tyco's March 12, 2001 closing price on the
New York Stock Exchange of $50.70 per share. The transaction will be immediately
accretive to Tyco earnings. Tyco has entered into a purchase agreement with The
Dai-Ichi Kangyo Bank, Limited for their approximately 71 million shares of CIT
(which constitutes approximately 27% of the outstanding shares) at a price of
$35.02, in cash, per CIT share.
"For years, our operating managers have advocated creating a financing
capability within Tyco to support the growth of our businesses," said L. Dennis
Kozlowski, Tyco's Chairman and Chief Executive Officer. "After evaluating
several paths to this goal, including developing a financing capability
in-house, we concluded that acquiring CIT gives us a faster, more efficient and
more robust solution at lower risk than anything we might have done internally
or through joint-venture or other approaches. Putting in place a fully
established leader in the commercial finance industry is the ideal platform for
us to fulfill this need.
"CIT is a very attractive growth company in its own right and will be its own
profit center. It is also an ideal fit for Tyco and will add great value to our
businesses as part of a total package we can offer customers," continued Mr.
Kozlowski. "CIT has a strong credit culture, an excellent customer base, and a
broad range of services that match up well with the full range of our financing
opportunities. This acquisition will enable us to capitalize on significant
organic growth opportunities within CIT and in each of our businesses. CIT will
enable us to deliver better working capital management to enhance our already
strong cash flow and financial leverage to greatly increase Tyco's capital
efficiency. Further, it will give us the ability to meet the current and
emerging financing needs of our
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customers, solidify customer relationships by enabling us to move toward
lifetime customer management in several Tyco units, and create a platform for
future growth and opportunity. In all, we expect this transaction to result in
enhanced levels of organic growth, recurring revenue, stable profitability, and
competitiveness across the entire Tyco enterprise.
"The CIT acquisition is a cornerstone transaction consistent with significant
past acquisitions of premier franchises such as Kendall, Sherwood, Davis & Geck,
US Surgical, Mallinckrodt, Grinnell, Keystone, ADT, AMP, and Raychem," added Mr.
Kozlowski. "In each case, we expanded the Tyco model to include an adjacent
business and we built that business into a world leader in its respective
market. We expect that the acquisition of CIT will provide similar ongoing
positive benefits to the shareholders and customers of CIT and Tyco."
Albert R. Gamper, Jr., Chairman, President, and CEO of CIT said, "This
transaction provides exceptional value for our shareholders and allows CIT
shareholders to participate in the future growth of Tyco. Like Tyco, we have
leadership positions in key industry sectors, a highly diversified revenue
stream, and strong operating platforms. The combination of our diversified
product offering and customer base with Tyco's financing opportunities, growth
prospects, and detailed industry knowledge enhances our competitiveness and
access to capital. CIT will continue to access funding markets independently and
maintain its strong credit ratings. That's why our Board and management team are
very excited by the opportunities the combination with Tyco presents for both
companies, our investors, and our customers." Mr. Gamper will remain with Tyco
as CEO and President of CIT, and will join Tyco's Board of Directors.
Accelerating Organic Growth
Tyco envisions utilizing CIT's financial capabilities across the full breadth of
its operations:
"Strong drivers for the demand of water and wastewater systems throughout the
world, from Clean Water Act compliance in the U.S., to aging systems in Europe,
to infrastructure development in Asia and South America, coupled with a shift
from public to privately financed systems is creating an enormous market for
companies with the ability to design, build, finance and operate these systems
in an integrated model," said Diane Creel, President of Tyco's Earth Tech
division. "Today, we are a world leader in this industry, but we have been
constrained in our ability to provide prospective customers with a complete
package that includes financing. Access to this resource through CIT will create
a compelling growth story through our ability to capture additional water
project market opportunities."
Neil Garvey, President of TyCom, said, "The strong demand outlook for undersea
bandwidth continues to exceed our expectations and forecasts. TyCom is the
undisputed leader in providing undersea fiber optic networks to help meet this
demand. As our business model has shifted to include bandwidth sales, our
ability to offer financing will be a significant competitive advantage. Along
with these bandwidth sales, as our TyCom Global Network is constructed as a
global undersea backbone, the need for regional feeder systems will accelerate.
Evidence our contracts with C2C, Bezeq, and DishNet DSL, all signed during the
past 6 months. The capability to provide turn-key solutions, including project
financing, for these regional feeder networks will be a key driver of the growth
of our third-party systems business."
"The ability to couple our product offering with financing and promote long-term
customer affiliations will significantly enhance our growth prospects," said
Juergen Gromer, President of Tyco Electronics. "This customer relationship
creates possibilities for product upgrades and replacements in areas such as our
Tyco Power Systems and M/A-COM business."
Mike Snyder, President of Tyco's ADT Security business said, "The ability to
offer on-the-spot financing or leasing options to both qualified commercial and
residential customers creates an opportunity to leverage the relationship with
our over 3 million customers in the U.S. For example, the services offered by
CIT's Vendor Technology Financing operation provide us an excellent life cycle
management tool, giving us the ability to harvest our loyal customer base with
systems enhancements and upgrades as security technology evolves as well as
offering a variety of other financial products."
The transaction, which will be accounted for as a purchase, is contingent upon
customary regulatory review and approval by CIT shareholders. The Boards of
Directors of both companies have approved the transaction, which is
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expected to be tax-free for the shareholders of CIT. Under the terms of the
agreement, CIT's shareholders will receive Tyco stock in a fixed exchange ratio
of 0.6907 for each share of CIT.
Conference Call
L. Dennis Kozlowski and Albert Gamper, Jr. will be discussing the merger on a
conference call today at 8:30 am EST. The toll-free phone number for U.S.
callers is (800) 288-8975. The number for international callers is (612)
332-0725. The call will also be webcast at the following site:
investors.tycoint.com/medialist.cfm.
About CIT
CIT is a leading, global source of financing and leasing capital for companies
in more than 30 industries. Managing more than $50 billion in assets across a
diversified portfolio, CIT is the trusted financial engine empowering many of
today's industry leaders and emerging businesses, offering vendor, equipment,
commercial, factoring, consumer and structured financing capabilities. Founded
in 1908, CIT operates extensively in the United States and Canada with strategic
locations in Europe, Latin and South America, and the Pacific Rim. For more
information on CIT, visit the Web site at www.cit.com.
About Tyco International
Tyco International Ltd. is a diversified manufacturing and service company. Tyco
is the world's largest manufacturer and servicer of electrical and electronic
components; the world's largest designer, manufacturer, installer and servicer
of undersea telecommunications systems; the world's largest manufacturer,
installer and provider of fire protection systems and electronic security
services, and the world's largest manufacturer of flow control valves. Tyco also
holds strong leadership positions in disposable medical products, diagnostic
imaging, bulk pharmaceuticals, wound closure, plastics and adhesives. Tyco
operates in more than 100 countries and has expected fiscal 2001 sales of $37
billion.
Forward-Looking Information
This release contains certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on management's current expectations and are subject to uncertainty and changes
in circumstances. Actual results may vary materially from the expectations
contained in the forward-looking statements. The forward-looking statements in
this release include statements addressing future financial and operating
results and the timing and benefits of the acquisition.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: inability to
obtain, or meet conditions imposed for, governmental approvals for Tyco's
acquisition of CIT; failure of the CIT shareholders to adopt the agreement
providing for Tyco's acquisition of CIT; the risk that the businesses of Tyco
and CIT will not be integrated successfully; and other economic, business,
competitive and/or regulatory factors affecting Tyco's and CIT's businesses
generally.
Detailed information about factors pertinent to the business of each Tyco and
CIT that could cause actual results to differ is set forth in Tyco's and CIT's
filings with the Securities and Exchange Commission, including Tyco's Annual
Report on Form 10-K, for the fiscal year ended September 30, 2000, CIT's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 and their most
recent Quarterly Reports on Form 10-Q. Tyco and CIT are under no obligation to
(and expressly disclaim any such obligation to) update or alter their
forward-looking statements whether as a result of new information, future events
or otherwise.
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Investors and security holders are advised to read the proxy
statement/prospectus regarding the business combination transaction referenced
in the foregoing information, when it becomes available, because it will contain
important information. The proxy statement/prospectus will be filed with the
Securities and Exchange Commission by Tyco International Ltd. and the CIT Group,
Inc. Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when available) and other documents filed by Tyco and CIT
at the Commission's web site at www.sec.gov. The proxy statement/prospectus and
such other documents may also be obtained from Tyco or from CIT by directing
such request to Tyco International Ltd., The Zurich Centre, Second Floor, 90
Pitts Bay Road, Pembroke HM 08, Bermuda, tel: (441) 292-8674; or to CIT Group,
Inc., 650 CIT Drive, Livingston, NJ 07039. tel: (973) 535-5911.
CIT and certain other persons referred to below may be deemed to be participants
in the solicitation of proxies of CIT shareholders to adopt the agreement
providing for Tyco's acquisition of CIT. The participants in this
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solicitation may include the directors and executive officers of CIT, who may
have an interest in the transaction including as a result of holding shares or
options of CIT. A detailed list of the names and interests of CIT's directors
and executive officers is contained in CIT's Proxy Statement for its 1999 Annual
Meeting, which may be obtained without charge at the Commission's web site at
www.sec.gov.
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