United States Court of Appeals For the Seventh Circuit ____________________ Nos. 21-3234 & 21-3308 PETER SMYKLA, et al., Plaintiffs-Appellants, Cross-Appellees, v. ALEX MOLINAROLI, et al., Defendants-Appellees, Cross-Appellants. ____________________

Appeals from the United States District Court for the Eastern District of Wisconsin. No. 2:16-cv-01093-PP — Pamela Pepper, Chief Judge. ____________________

ARGUED SEPTEMBER 19, 2022 — DECIDED NOVEMBER 6, 2023 ____________________

Before WOOD, SCUDDER, and JACKSON-AKIWUMI, Circuit Judges. JACKSON-AKIWUMI, Circuit Judge. This securities appeal asks us to decide whether a proxy statement disclosing the terms of a merger contained materially misleading statements and omissions that altered the total mix of information avail- able to shareholders. The district court dismissed all claims, finding that the proxy statement provided shareholders with ample information. We affirm. 2 Nos. 21-3234 & 21-3308

I

In January 2016, Johnson Controls, Inc. (“Johnson”), a Wis- consin company, entered into an agreement to merge with Tyco International plc, an Irish company. The combined en- tity, Johnson Controls International plc (“Johnson Interna- tional”), is domiciled in Ireland. The terms of the merger were disclosed to shareholders in a joint proxy statement/prospec- tus filed by Tyco with the Securities and Exchange Commis- sion as part of a Form S-4 registration statement in April 2016. Tyco refiled a final version of the prospectus in July 2016. Johnson retained two financial advisors in connection with the merger. The financial advisors analyzed whether the deal was overall “fair” to Johnson shareholders and issued opinions that included a description of the assumptions they made, procedures they followed, and matters they consid- ered, as well as the limitations of their opinions. The financial advisors’ opinions were disclosed in the proxy statement. Alt- hough the advisors concluded that the merger was overall “fair,” the proxy statement made clear that the market price of the shares would fluctuate, and Johnson shareholders could not be sure of the value of consideration they would receive in the merger. The proxy statement disclosed that each share of John- son’s common stock would be, at the election of the share- holder, either converted into an ordinary share of Johnson In- ternational, or cashed out for $34.88 per share. However, Johnson shareholders were expected to own approximately 56% of Johnson International, meaning Johnson shareholders Nos. 21-3234 & 21-3308 3 would have reduced ownership of Johnson International. 1 The proxy statement disclosed that both the conversion and cash out of shares would be treated as taxable transactions for Johnson shareholders. It encouraged the shareholders to con- sult their own tax advisors regarding the tax consequences of the merger. Shareholders were also informed that Johnson’s directors and executive officers had interests in the merger that were different from, or in addition to, interests of shareholders. The transaction was structured as a “reverse merger”: Johnson merged with an indirect wholly owned Wisconsin subsidiary of Tyco, Jagara Merger Sub LLC. The 56% equity expectation for Johnson shareholders was calculated to pre- vent triggering Sections 7874 and 4985 of the U.S. Internal Revenue Code. Section 7874 provides, in relevant part, that when a domestic corporation is acquired by a foreign entity, but its former shareholders retain at least 60% of the stock, the expatriated entity must pay “inversion gain” taxes. See 26 U.S.C. § 7874(a) (“The taxable income of an expatriated