Johnson Controls May Acquire Tyco Despite Market Turbulence

Last year was a record breaking year for mergers and acquisitions as some of the biggest names on Wall Street joined forces and spent big bucks to expand their marketshare. This year, with markets off to a bumpy start, many wondered whether or not the wave of corporate combinations would fizzle out. However, energy and efficiency firm

and security company

appear to be moving forward with their M&A plans despite the recent uncertainty.

According to the

, Johnson Controls has entered into advanced talks to acquire Tyco as part of the firm's efforts to expand its reach in the industrial market. Johnson Controls Chief Executive Alex Molinarili has recently been steering the firm away from the automotive industry and more toward its more profitable industrial business. Molinaroli has always said he wouldn't discount the possibility of an acquisition in order to expand the firm's businesses and purchasing Tyco could do that.

At the moment it remains unknown whether or not the deal will go through, and if it does what its terms would be. Many expect that Tyco would be valued at between $15 and $20 billion due to the fact that the company's shares have lost quite a bit of value over the past year.

If Johnson Controls does decide to acquire Tyco, it will send a strong message about the state of the M&A market to investors. Because share prices have fallen exponentially in recent weeks, many expected to see the M&A market cooling, but many companies are continuing to make deals despite the uncertainty. The Johnson Controls and Tyco deal, if agreed to, is expected to include some type of share swap in order to account for market ups and downs, especially since both firms have lost comparable amounts in recent weeks. These types of agreements are likely to crop up more and more this year as firms continue to combine amid declining stock prices.