Trenton, NJ – Tyco International Ltd. has confirmed its plan to split into three public companies. Electronics and healthcare units will be spun off from the remaining operations (which include security and fire-protection services) during the first quarter of 2007. Tyco expects about $1 billion in costs for tax liabilities and the refinancing of debt.

“We believe separation is a logical next step in Tyco's solution,” said Ed Breen, chairman and chief executive, during a conference call with analysts and investors. “The biggest issue to me actually was growth. That's really the thing we looked at.”

Organic revenue, or sales increases from existing businesses, rose 3% last year, short of the goal of 4 to 6%, Breen said. With news of the break-up, Tyco lowered its first-quarter earnings and 2006 forecasts. On the NYSE, Tyco shares dropped 9.4% to $27.45.

Juergen Gromer will remain president of the electronics unit, a $12 billion business with 88,000 employees.Gromer, who has led the electronic components supplier since 1999, will also become vice chairman.
 
Rumors  abounded in the past few months that Breen was ready to split up the business to boost stock value. The company had tried to sell off its separate businesses in 2002, but was stymied by investors’ increasing woes over the scandals of top executives Dennis Kozlowski and Mark Swartz.
 
Tyco did spin off its CIT Financial arm to shareholders for $4.6 billion (less than half what it paid for the company a year before), and also managed to sell its plastics business last year.