company, has announced plans to buy independent commercial financing company, the CIT Group, for around $9.2 billion.

Tyco will add this financing component to its broad array of businesses through a tax-free stock-for-stock exchange.

CIT shareholders will receive 0.6907 Tyco shares for each CIT share, which values the transaction at $35.02 per share to the CIT shareholders.

Tyco said Japan's Dai-Ichi Kangyo Bank has agreed to sell its 71 million CIT shares, which represent a 27 percent stake in the company, to Tyco for $35.02 per share in cash. The price of $35.02 is a 54 percent premium over CIT's Monday's closing price of $22.75 on the New York Stock Exchange.

Denis Kozlowski, Tyco's chairman and chief executive officer, said: " For years our operating managers have advocated creating a financing capability within Tyco to support the growth of our business. After evaluating several paths to this goal, including developing a financing capability in-house, we concluded that acquiring CIT gives us a faster, more efficient and more robust solution at lower risk than anything we might have done internally or through joint venture or other approaches.

"Putting in place a fully established leader in the commercial finance industry is the ideal platform for us to fulfil this need. CIT is a very attractive growth company in its own right and will be its own profit centre.

It is also an ideal fit for Tyco and will add great value to our businesses as part of a total package we can offer customers.'' He describes CIT as having a strong credit culture, an excellent customer base and a broad range of services that match well Tyco's range of financing opportunities.

"CIT will enable us to deliver better working capital management to enhance our already strong cash flow and financial leverage to greatly increase Tyco's capital efficiency,'' he said.

"The CIT acquisition is a cornerstone transaction consistent with significant past acquisitions of premier franchises such as Kendall, Sherwood, Davis & Geck, US Surgical, Mallinckrodt, Grinnell, Keystone, ADT, AMP and Raychem. In each case we expanded the Tyco model to include an adjacent business and we built that business into a world leader in its respective market. We expect the acquisition of CIT will provide similar ongoing positive benefits to the shareholders and customers of both CIT and Tyco.'' CIT is a leading global source of financing and leasing capital for companies in more than 30 industries. It manages more than $50 billion in assets across a diversified portfolio and offers vendor, equipment, commercial, factoring, consumer and structured financing capabilities.

It was founded in 1908 and operates extensively in the US and Canada, with strategic locations in Europe, Latin and South America and the Pacific Rim.

In January this year CIT's results showed a 13th consecutive year of earnings growth. For the 12 months to the end of December 2000, net income totalled $611.6 million, a 57.1 percent increase on the previous year. On a diluted per share basis earnings for 2000 were $2.33 compared to $2.22 in 1999.

At the time Albert Gamper, CIT's chairman, president and CEO, said: "Despite a softening economy, CIT produced record net income for the quarter and the year, driven by strong performances from its diversified franchises. For well over a decade, in both favourable and tough economies, CIT has consistently produced earnings growth while maintaining a strong balance sheet.'' Under the acquisition agreement Mr. Gamper will stay on in the merged company as CEO and president of CIT and will join Tyco's board of directors.

He said of the merger: "This transaction provides exceptional value for our shareholders and allows CIT shareholders to participate in the future growth of Tyco. The combination of our diversified product offering and customer base with Tyco's financing opportunities, growth prospects and detailed industry knowledge enhances our competitiveness and access to capital.

"CIT will continue to access funding markets independently and maintain its strong credit ratings. Our board and management team are very excited by the opportunities the combination with Tyco presents for both companies, our investors and our customers.'' SPENDING SPREE Some of the acquisitions that Bermuda-registered Tyco International has made since 1997: March, 1997 ADT $5.6 billion March, 1998 AMP $1.77 billion April, 1998 Borg Warner $425 million May, 1999 Raychem $2.78 billion August, 1999 General Surgical Innovations $100 million October, 1999 Praegitzer Industries $72 million November, 1999 Siemens Electromechanical $1.1 billion October, 2000 Mallinckrodt $4.2 billion November, 2000 Lucent Technologies $2.5 billion