Merger of Tyco and Johnson Controls in Cork to deliver $150m of tax savings

The controversial merger of Tyco and Johnson Controls will yield significant benefits for the newly combined company in Cork when the deal completes later this year, its head of its Irish operations says.

The so-called ‘inversion’ deal, which the companies predicted would deliver at least $150m of tax savings each year and $500m in costs over the initial three years, drew the ire of US politicians last week and put a renewed focus on Ireland’s corporate tax regime.

Tyco Ireland’s general manager Donal Sullivan predicted the move would work out favourably for its Irish operations.

“For us locally, it certainly looks like it’s going to be a huge boost to what we do so by combining Tyco with Johnson Controls — and that gets formally approved in September of this year — we become a $33bn revenue company with over 140,000 people in the company, globally headquartered in Cork,” he said.

“That is a company of significant scale by global standards and to have its global headquarters here in Cork is wonderful for us and wonderful for lots of you, I hope, over time,” he told the UCC business conference.

Mr Sullivan added that despite some initial planning delays at One Albert Quay, which is set to become its new headquarters, Tyco would begin moving into the landmark office development on time, today.

Since announcing its intention to expand its Irish workforce to 700 staff in late 2014, Mr Sullivan said the company had hired 250 of those employees with returning emigrants making up a significant proportion of the new hires.

Also speaking at the UCC Commerce Society 34th annual business conference, Ryanair chief marketing officer, Kenny Jacobs, said the airline was unlikely to add additional routes at Cork Airport as part of its winter schedule later this year.

Mr Jacobs commended the management of the airport for a number of major routes that have been added over the past year, including the proposed transatlantic routes operated by Norwegian Air.

He added, however, that its winter schedule from Cork was likely to be “broadly flat”.

The airline has long argued that airport charges are too high in Cork and Mr Jacobs said the economic opportunity to add extra aircraft wasn’t yet persuasive enough.

The load factor — the proportion of seats an airline fills on a flight — could be better on some of its current services from the airport too.

Mr Jacobs predicted that fares would continue to fall.

“This year is a very good year for customers getting very, very low air fares and I think that’s what you’ll [continue to] see.

"So we’re guiding minus 6% [on fares] for our quarter up to the end of March and then we’re saying from the first half of next year — while we don’t have visibility yet — we think that it will be competitive and that fares will be lower than they were for the first half of last year.”