Mega manufacturers Johnson Controls and Tyco have agreed to merge in a deal that will create an international conglomerate with $32 billion in annual revenue.

Under the terms, Milwaukee-based Johnson Controls will move its legal headquarters to Cork, Ireland, a change that will save $150 million in U.S. tax liabilities, the companies said.

"The proposed combination of Johnson Controls and Tyco represents the next phase of our transformation to become a leading global multi-industrial company," said Alex Molinaroli, chairman and chief executive officer of Johnson Controls Inc. "With its world-class fire and security businesses, Tyco aligns with and enhances the Johnson Controls buildings platform and further positions all of our businesses for global growth.  Through this transaction, we will also expand our ability to further invest globally, develop new innovative solutions for customers and return capital to shareholders."

Johnson Controls’ product segments include automotive, HVAC construction and other HVAC market segments. Tyco is one of the world’s largest fire protection security companies.

Johnson Controls shareholders will own 56 percent of the new company and will receive $3.9 billion in cash. Tyco shareholders will own the remaining 44 percent.

George R. Oliver, Tyco’s chief executive officer, said the deal will allow Tyco to reach new markets.

"The combination of Tyco and Johnson Controls is a highly strategic, value-enhancing step that brings together the unique strengths of two great companies to deliver best-in-class building technologies and services to customers around the world," Oliver said. "We believe this transaction will allow us to better capture opportunities created by increased connectivity in homes, buildings and cities. Joining forces with Johnson Controls pairs our leading established businesses with robust innovation pipelines and extensive global footprints to deliver greater value to customers, shareholders and employees of both companies."

The deal is expected to close later this year.