Johnson Controls merger with Tyco, Adient spin both on track
(Reuters) - Auto parts maker Johnson Controls Inc (JCI.N: Quote) said on Thursday its merger with Ireland-based Tyco International Plc TYC.N is to close on Oct. 1 in a move that would lower its tax rate.
During a conference call with analysts Johnson Controls CFO Brian Stief said the company expects the 17 percent tax rate to be sustainable through fiscal year 2017. The tax rate was previously 19 percent.
While the North American headquarters will remain in Milwaukee, Wisconsin, the international headquarters for the combined company will be in Ireland.
Earlier this month the U.S. Treasury Dept unveiled new rules to curb "tax inversions," which forced U.S. drugmaker Pfizer Inc (PFE.N: Quote) to terminate its $160 billion agreement to acquire Botox maker Allergan Plc (AGN.N: Quote).
The Johnson Controls deal triggered criticism from Democratic presidential candidates Hillary Clinton and Bernie Sanders when it was announced in January.
The company posted a quarterly loss on Thursday, due to higher costs, but earnings before special items exceeded analysts' estimates, boosting the shares more than 4 percent.
Johnson Controls said it had a net loss of $530 million, or 82 cents per share, for the second quarter ended March 31, compared with a year-earlier profit of $529 million, or 80 cents per share.
Despite the loss, investors likely viewed the fundamental business operations as positive, said Efraim Levy, S&P Global Market Intelligence analyst.
Excluding transaction integration, separation costs and other non-recurring items, the profit of 86 cents per share beat analysts' estimates of 82 cents. Continued...