Here you go Eagle.. About Breens plan..
My note: If you had a $35 share of Tyco, when Bremen took over; that share is now worth $350..
DowDuPont break-up: Edward Breen to use Tyco experience
BOB TITA, JOANN S. LUBLIN
The Wall Street Journal12:00AM January 7, 2016
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To gauge the future of the planned chemical titan DowDuPont, it helps to look back at the dismantling of another industrial giant: Tyco International.
DuPont chief executive Edward Breen spent a decade as Tyco chief executive, pulling apart what was once among the largest US conglomerates. He transformed Tyco from a company with $US41 billion a year in revenue to one that now has about $US10bn ($14bn) in annual sales, mostly from security and fire-suppression systems for commercial buildings.
Mr Breen and Dow Chemical chief executive Andrew Liveris plan to similarly disassemble their two companies after first merging them into one with about $US90bn a year in combined sales. Mr Breen will be the chief executive of the resulting enterprise, DowDuPont, which the companies hope regulators will approve by the year’s end.
Executives plan to eliminate about $US3bn in annual costs, then split DowDuPont by 2018 into separate companies focused on agriculture, industrial materials and specialty products.
Mr Liveris, who will be chairman of the combined company, brings some experience in separating businesses as well. Dow last year split off much of its chlorine business in a $US5bn deal with smaller rival Olin.
“You always have productivity as your focus,” Mr Liveris said, adding that the company had figured out how to stay lean while it grows.
Mr Breen said his Tyco experience offered a guide to how to select and prepare executives for the changes.
Several people who know him agree that his Tyco work show an ability to assess how executives and business units could slide effectively into new companies.
Here you go Eagle..
“He likes stepping into situations that have a lot of moving parts,” said Deane Dray, a longtime analyst covering industrial conglomerates at RBC Capital Markets. “It’s easier for CEOs to be acquisitive and empire builders than to be diplomatic and ruthless about making decisions to create viable spin-outs. He’s not shy about controversy.”
During Mr Breen’s tenure as Tyco’s chief, which ended in 2012, the company sold about 100 businesses, hived off three public spin-offs, and made Tyco shareholders majority owners of a fourth through a merger.
Some of the resulting stocks became hits, particularly medical-equipment company Covidien. Others have fared less well, particularly home-security service ADT.
Unlike DuPont or Dow, Tyco was in perilous financial shape when Mr Breen arrived in 2002 after serving as president of Motorola.
Mr Breen created trust among the future CEOs, and avoided surprises.
Mr Breen said he tried to be clear with employees about their aspirations and prospects. “People were nervous,” Mr Breen said, but “that process worked very well for us.”
Jack Krol, a retired DuPont chief who was Tyco’s lead independent director during much of the Breen era, expects Mr Breen to follow the same break-up playbook at DowDuPont. “He will send the companies out with strong balance sheets and the right kind of people to run them,’’ Mr Krol said. In that way, “they don’t run into trouble”.
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