By Reuters On 01/25/16 AT 5:26 PM
Hillary Clinton called the planned inversion by Johnson Controls and Ireland-based Tyco "outrageous," and said as president she would block such moves using an "exit tax." Earlier, Johnson Controls and Tyco announced plans to merge, creating a company with revenue of about $32 billion.
"These efforts to shirk U.S. tax obligations leave American taxpayers holding the bag while corporations juice more revenues and profits," Clinton said in a statement. "I have a detailed and targeted plan to immediately put a stop to inversions and invest in the U.S., block deals like Johnson Controls and Tyco, and place an 'exit tax' on corporations that leave the country to lower their tax bill."
Johnson Controls announced on Monday a plan to buy Tyco for $16.5 billion, which the companies said will save $500 million in taxes in the first three years and an additional $150 million a year through tax synergies.
The new company, to be called Johnson Controls Plc, will be headed by Johnson Controls Chief Executive Alex Molinaroli and will continue to trade on the New York Stock Exchange.
Johnson Controls has been preparing to spin off its automotive seating and interiors business and said on Monday the spinoff was on track for early first quarter of 2017.
Shares of Johnson Controls have lost more than a quarter of their value since the start of 2015, while Tyco's shares have fallen by over 30 percent.