Johnson Controls said to be in talks to combine with Tyco International

The deal could value Tyco at as much as $20 billion

The logo of Johnson Controls stands over its production plant on March 1, 2009 in Hanover, Germany. The U.S. company manufactures car interiors, electic batteries and energy efficiency systems for buildings. (Getty)

Johnson Controls, a US heating and ventilation company, is reportedly in advanced talks to buy Tyco International, an Ireland-based security systems company with headquarters in the US.

The deal could value Tyco at as much as $20 billion, the Wall Street Journal reported. It is said to show that that big mergers are still on the cards despite a difficult start to the year for global stock markets.

Johnson Controls has a market capitalisation of $23 billion, while Tyco is valued at $13 billion. Shares in both companies have lost more than a quarter of their value in the last year over growth concerns.

The Independent has contacted both companies for comment.

The deal would also open the door for tax inversion, when a US company acquires a foreign-based rival to take advantage of lower tax.

Alex Molinaroli, chief executive of Johnson Controls since 2013, is expected to run the combined company. He is going ahead with the sale of Johnson's automotive-interiors operations, which could result in the loss of 3,000 jobs.

The combined company would complete the transition of Johnson Controls from a maker of car parts including batteries and building controls, to two more focussed companies, Bloomberg said.