Harris To Buy Tyco Electronics Wireless Business For $675 Million

   DOW JONES NEWSWIRES 
 

Tyco Electronics Ltd. (TEL) said it agreed to sell its wireless systems business to Harris Corp. (HRS) for $675 million in cash.

"This acquisition greatly accelerates our entry into the land mobile radio systems market and creates a significant opportunity for growth in both North American and international markets," said Dana Mehnert, president of Harris' RF communications segment.

Tyco Electronics' shares jumped 6.5% to $15.20 in after-hours trading while Harris' were unchanged at $28.20.

Tyco Electronics' wireless systems unit, which will be combined into the RF communications segment, develops large-scale communications systems based on Internet Protocol technology for law enforcement, fire and rescue, utility, transit and public service customers. The business generated sales of $463 million in fiscal 2008.

Harris will finance the deal with a combination of existing cash, borrowings available under its $750 million revolving credit facility and long-term debt.

The acquisition is expected to boost Harris' earnings slightly in fiscal 2010, excluding acquisition-related charges, and to contribute significantly to earnings in fiscal 2011 and 2012.

Tyco Electronics Chief Executive Tom Lynch said the sale, expected to close this summer, "will increase our focus on our core connectivity business and substantially completes the streamlining of our portfolio that we began two years ago."

Tyco also said it expects to report a fiscal second-quarter operating loss of $3.6 billion to $4.1 billion because of a goodwill write-down and restructuring and litigation charges. Expected revenue of $2.46 billion was in line with previous guidance.

Tyco Electronics split from Tyco International Ltd. (TYC) last June.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; [e-mail]