The deal is part of a massive restructuring by the German company, which is selling off Siemens Electromechanical Components GmbH & Co. and eight other divisions. The sale has to be approved by cartel authorities, Siemens said in a statement in Munich.

Tyco spokesman Brad McGee said approval was needed from German, European Union and U.S. regulatory authorities, but the company anticipated the acquisition would be concluded by the end of the calendar year.

"This is the type of deal that garners two thumbs up from industry watchers," said David Leibowitz, an analyst at Burnham Securities. "It looks to be one of the better deals to come down the chute this year."

However, shares of Tyco, which signed a definitive agreement with Siemens, slid $2.56 to $96 on the New YorkStock Exchange in afternoon trading Tuesday.

Leibowitz cautioned not to pay too much attention to the stock price on a day when the Dow Jones Industrial Average was down over 100 points.

"Quality is a byword of Siemens, and the whole sense of the transaction speaks to the success of the venture," said Leibowitz, noting that Tyco had said the acquisition would soon add to its earnings.

Siemens Electromechanical, with annual sales of about $900million, employs 12,400 people and is a leading provider of components to the communications, automotive, consumer and general industry sectors.

"Tyco won't make an acquisition unless it is accretive and has an excellent strategic fit with our existing businesses," said Tyco chairman and chief executive officer Dennis Kozlowski.

"So to say that Siemens Electromechanical Components'(Siemens EC's) business is an excellent fit with Tyco Electronics and will have a significant immediate positive impact to earnings probably doesn't do justice to the quality of thisopportunity."

Kozlowski said that the Siemens unit's relays were complementary with Tyco Electronics' connectors and interconnect products.

"From a market standpoint, the combination of Siemens EC's strengths in the telecommunications industry and Tyco Electronics' in the automotive industry provides powerful opportunities to enhance our combined market position."

Tyco operates in four sectors: electrical and electronic components, including undersea telecommunications systems; fire safety systems and electronic security services; flow-control valves; and disposable medical products, plastics and adhesives.

Tyco, which is registered in Hamilton, Bermuda, and has corporate offices in Exeter, N.H., recently announced a two-for-one stock split which Kozlowski said was "based upon the company's strong performance and outlook for the future."

In July, Tyco reported an increase in third fiscal quarter operating income to $699.4 million from $400.1 million a year before. Sales in the quarter rose to $5,82billion from $4.95 billion in the same period last year.

Tyco laid off about 9,330 employees and closed 87 facilities at the end of June following numerous recent acquisitions.

Most of the layoffs, about 8,400, were related to Tyco's mid-1998 merger with U.S. Surgical Corp. and the purchase of AMP Inc. in April, Tyco said.

Analyst Leibowitz said: "Given that Tyco is very aggressive in acquiring companies, it doesn't surprise me that some industry watchers had this (Siemens EC) pegged as a target.

"Any number of companies have over extended themselves into deficit positions, but how many companies (like Tyco) have managed acquisitions so smoothly that the numbers only got better?"

Some of Tyco's other recent acquisitions include Entergy Security Corp. in January, Alarmguard Holdings Inc. in February and the metals processing division of Glynwed International Plc in March.