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June 27, 2000

Tyco International To Acquire Mallinckrodt

COMPANY PRESS RELEASE: Tyco International Ltd. and Mallinckrodt Inc. a global healthcare company, today announced that they have entered into a definitive agreement pursuant to which Tyco will acquire Mallinckrodt.

By CBR Staff Writer

Mallinckrodt shareholders will receive Tyco shares valued at $47.50 for each share of Mallinckrodt. The transaction is valued at approximately $4.2 billion. Mallinckrodt, which had 1999 revenues of $2.6 billion, has major positions in respiratory care, diagnostic imaging and analgesic pharmaceuticals.

Mallinckrodt provides an excellent strategic fit with Tyco Healthcare, with complementary products, services and geographic reach, as well as platforms for future growth, according to L. Dennis Kozlowski, Tyco’s Chairman and Chief Executive Officer.

The Mallinckrodt acquisition will be immediately accretive to Tyco’s earnings, Mr. Kozlowski stated. It offers consolidation opportunities as well as significant manufacturing, purchasing and distribution synergies. Our past acquisitions in Tyco Healthcare have achieved strong top line growth and operating efficiencies. We expect that the acquisition of Mallinckrodt also will provide ongoing positive benefits to Tyco shareholders.

Tyco has a strong history of success in building leadership positions in the healthcare industry. Tyco Healthcare has grown to be a powerful force in disposable medical supplies and medical devices through previous acquisitions of such industry brands as Kendall, United States Surgical, Auto Suture, Sherwood, Davis & Geck, Graphic Controls and ValleyLab. With the addition of Mallinckrodt, Tyco Healthcare will become the second-largest manufacturer, distributor and servicer of medical devices worldwide, and the leader in bulk analgesic pharmaceuticals, Mr. Kozlowski continued.

This acquisition will make Tyco Healthcare the leader in the fast growing global respiratory care arena, with products such as Mallinckrodt endotracheal tubes, Shiley tracheostomy tubes, Nellcor pulse oximeters, Puritan-Bennett ventilators, and new technologies including the recently launched OxiFirst fetal oxygen monitor and HELiOS liquid oxygen system. Mallinckrodt also is a leader in developing new products in the growing alternate care markets for home oxygen therapy, sleep therapy and portable ventilation. In diagnostic imaging, Mallinckrodt has leadership positions in imaging contrast agents and radiopharmaceuticals, including Optiray and OptiMark. Pharmaceutical products include leadership positions in bulk pharmaceuticals and a rapidly growing dosage product line.

The combined strength of Mallinckrodt’s products and Tyco’s global sales and service organization will allow Tyco Healthcare to leverage its international infrastructure and enhance penetration in key geographic markets, stated Mr. Kozlowski. Mallinckrodt’s strong positions in the respiratory, pharmaceuticals and diagnostic imaging segments will provide Tyco with excellent platforms for future acquisitions and licensing agreements.

C. Ray Holman, Chairman of the Board and Chief Executive Officer of Mallinckrodt, said, This transaction provides exceptional value for our shareholders and allows Mallinckrodt shareholders to participate in the future growth of Tyco. There has been substantial consolidation in our industry in recent years and we expect that to continue. We believe companies most likely to succeed will have higher sales, more leverage to operate globally and a larger basket of products to take to consolidated purchasers. That’s why our Board and management team are very excited by the opportunities the combination with Tyco presents for both companies, our investors and our customers.

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The transaction, which will be accounted for as a purchase, is contingent upon customary regulatory review and approval by Mallinckrodt shareholders. The Boards of Directors of both companies have approved the transaction, which is expected to be tax-free for the shareholders of Mallinckrodt. Under the terms of the agreement, Mallinckrodt’s shareholders will receive Tyco stock equivalent to $47.50 for each share of Mallinckrodt. The number of Tyco shares they receive will be based on the volume weighted average prices of Tyco shares on the New York Stock Exchange composite tape for the five consecutive trading days ending on the day before the conditions to the acquisition are satisfied.

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