Tyco to Build Undersea Fiber Network

Tyco International Ltd. said it plans to build the world’s largest undersea fiber-optic network and sell 20% of the business in an initial public offering. The undersea network will be known as TyCom Global Network. Tyco expects to file a registration statement for the IPO in the first quarter and to complete the offering by midyear. Analysts have estimated Tyco has as much as 45% of the $12-billion market for making and maintaining the cable that carries Internet traffic, among other things. Now, it will directly compete with companies such as Global Crossing Ltd., a 2-year-old company that’s completing a land and undersea network to lease space to telecommunications companies. Merrill Lynch analyst Phua Young estimates that Tyco will spend $4 billion to $6 billion on the project initially and that shares in the stake will be priced between $12 and $18 apiece. Tyco has been the biggest maker of undersea fiber-optic cable since 1974, when it bought Simplex Technologies. In the first part of the project, Tyco will lay undersea cables covering more than 50,000 miles and connecting 25 major cities, including Los Angeles, New York, London and Tokyo. The transatlantic part of the first phase is expected to be complete by the end of 2001. On Friday, Tyco shares closed at $34.88, up 50 cents, on the New York Stock Exchange. The company is expected to report its fiscal first-quarter earnings today.