Pembroke, Bermuda-based Tyco, whose businesses range from medical supplies to fire-detection equipment, will offer Mallinckrodt shareholders $47.50 in Tyco stock for each of their shares, bringing the equity portion of the deal to about $3.1 billion. Tyco will also assume $1.1 billion in Mallinckrodt debt.

The deal continues Tyco's seemingly never-ending string of acquisitions and company officials said there was no reason it should slow in the second half of 2000.

"We're seeing plenty of opportunities out there," Tyco chief executive Dennis Kozlowski said in a conference call.

Mallinckrodt has major positions in respiratory care, diagnostic imaging and narcotics. It imports 60 per cent of the opium used for medical purposes in the US, Tyco executives told analysts.

Mallinckrodt shares rose 2-5/8 to close at 31-3/8 on the New York Stock Exchange on Wednesday. Tyco fell 15/16 to close at 46-5/16.

"The Mallinckrodt acquisition will be immediately accretive to Tyco's earnings," Kozlowski said in a statement. "It offers consolidation opportunities as well as significant manufacturing, purchasing and distribution synergies."

The transaction, which will be accounted for as a purchase, is contingent on regulatory review in the US and the European Union, and approval by Mallinckrodt shareholders. The boards of both companies have approved the transaction, set to close in October.

Analysts said the deal was a good fit for Tyco and appeared to mark the end of a period of uncertainty for the company, which has been under a cloud as the Securities and Exchange Commission (SEC) reviewed its accounting methods. After the SEC review, Tyco amended some of its past earnings statements, and cleared the air.

The SEC is still proceeding with a further review of the company and Kozlowski declined to comment on when that probe would be concluded. Edward Wheeler, analyst with Buckingham Research Group, said the deal made sense.

"For the majority of it, this looks like a nice fit," Wheeler said. He noted that Tyco has a strong record of identifying companies in which it can add expertise and gain efficiencies through integration.

"It's also a fit in that (Mallinckrodt) is a stock that's been under some pressure. This company has to increase its rate of growth and I'm sure Tyco has figured a way to do that," he said.

Kozlowski said the price was fixed at $47.50 in Tyco stock per Mallinckrodt share but said there was a "walk away" provision that kicked in for Tyco if Mallinckrodt stock rose to $37.

In that case, Mallinckrodt had an option accept fewer Tyco shares, he said.Tyco was advised on the deal by Bear, Stearns and Merrill Lynch and Mallinckrodt used Goldman Sachs and JP Morgan.