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Re:

Why Tyco Bought Siemens Electromechanical Components for $1.1 Billion

Tyco’s 1999 purchase of Siemens Electromechanical Components added a roughly $900 million-a-year relay and components business to Tyco Electronics.
From TheFinanceBase Team2 min to read
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Tyco International agreed in September 1999 to buy Siemens AG’s complete Electromechanical Components business for approximately $1.1 billion in cash. The deal gave Tyco a business with about $900 million in annual sales and a leading position in relays; it also fit a broader acquisition strategy that Tyco later described as a successful investment in electronics.

What did Tyco buy from Siemens?

The sale covered Siemens Electromechanical Components GmbH & Co. KG and related electromechanical-components assets in the United Kingdom and Italy, according to the European Commission’s merger decision. Tyco described the business as the world market leader for relays and a leading supplier of components to communications, automotive, consumer and general-industry customers. Its annual sales were approximately $900 million, according to Tyco International’s 1999 annual report.

Relays are electrically operated switches used in equipment and systems across those markets. The acquisition therefore added a broad components business, rather than a consumer-facing Siemens product line.

How much did Tyco pay, and when did the deal close?

Tyco announced the agreement on September 28, 1999. Its 1999 annual report records that the transaction closed on November 23, 1999, for approximately $1.1 billion in cash. Siemens’ announcement quoted the consideration as about DM2 billion and said antitrust approval was required before closing: Siemens announcement, September 28, 1999.

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(2pcs) 24V Relays,din Rail,24V Coil dc/ac,Slim,HF41F/24-ZS 5 Pin 1NO 1NC 6A
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Why did Tyco want the business?

The acquisition expanded Tyco Electronics’ position in electronics components and strengthened its passive-electronics platform. Contemporary reporting said the Siemens business would be integrated into Tyco Electronics’ Telecommunications and Electronics segment, with the combined group positioned as a world leader in passive electronics products.

Siemens presented the sale as part of a program to improve profitability and separate its components activities. The transaction thus served different strategic aims: Tyco gained scale and product breadth, while Siemens divested a business as it reshaped its portfolio.

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How did this fit Tyco’s acquisition binge?

The Siemens purchase was one of several large acquisitions in Tyco’s rapid expansion. CFO.com’s retrospective lists Siemens Electro Products at $1.1 billion in cash, completed in November 1999, alongside other major Tyco purchases: CFO.com’s acquisition overview. Its table places the Siemens transaction among deals including AMP, Raychem, Thomas & Betts’ OEM business, Lucent Power Systems, and later Simplex and CIT.

Tyco’s 2000 annual report later reflected positively on this electronics push: “Our decision to invest heavily in electronics by acquiring Siemens Electromechanical Products and Thomas & Betts’ OEM business, among others, has turned out better than we could have imagined.” The statement appears in Tyco International’s shareholder letter in its 2000 annual report.

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(2pcs) 24V Relays,din Rail,24V Coil dc/ac,Slim,HF41F/24-ZS 5 Pin 1NO 1NC 6A
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PC775-1A-12C-D2-X | 75 Amp 12 VDC Automotive High Current Power Relay, SPST-NO 12VDC Coil with Double Diode & Bifurcated Contacts | Cross TE V23232-A0001-X003 & Bosch 0332002156
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