Global Carrier Corp. says it made a “tough” decision to exit from its Fire and Security and Commercial Refrigeration businesses to focus on being a world leader in intelligent climate and energy solutions.
Carrier announced Wednesday it purchased Viessmann Climate Solutions for $13.1 billion in cash and stock. Allendorf, Germany-based Viessmann is a privately held company that Carrier believes will provide a premium brand in the highest-growth segment of the global heat pump and energy transition markets.
Carrier plans to exit the Fire and Security and Commercial Refrigeration businesses during 2024. The deal does not include Carrier’s UTEC controls business for residential HVAC customers, or Carrier Transicold's transport refrigeration, Profroid mechanical systems or Sensitech monitoring businesses. The Fire and Security portion of Carrier includes the Kidde residential fire brand; Edwards and GST commercial fire brand; and Autronica, Marioff, Det-Tronics industrial fire brands. The security brands include Lenel S2, Onity and Supra.
The Fire and Security businesses had 2022 sales of $3.1 billion and their brands are all No. 1 or No. 2 brands in their markets, according to Carrier. The Commercial Refrigeration unit logged $1.2 billion in sales in 2022, with the majority of it through Carrier’s refrigeration cabinets. What the future holds for the Fire and Security and Commercial Refrigeration units is uncertain.
Company officials say the exit from its Fire and Security and Commercial Refrigeration businesses will “allow for a more focused portfolio centered around climate solutions with an accelerated growth profile.”
The businesses may be sold as one piece, or be spun off or sold in various pieces, CEO David Gitlin noted during a Wednesday earnings call, adding that he didn’t expect the sale price to be the same or lower than the $3.1 billion that Chubb Fire and Security was sold for earlier this year, but “materially higher.”
“Here you’re dealing with highly differentiated and high-growth-margin businesses, usually with 3-5 competitors in their spaces,” Goris says. “They’re going to be hugely sought after and we will see, as we go through process, what the best way is to sell.”
“This was a very, very difficult decision,” Gitlin. “We love these businesses and the people who are in them. They have tremendous brand, gross margins, market positions and customer stickiness. But just because it’s such a phenomenal business doesn’t mean it belongs in our portfolio. It’s a tough decision, but the right decision for the long-term of the business.”
Some may recall that in 2019 Carrier Fire & Security Products – then a division of UTC – opted to "wind down" its Interlogix business in the U.S. and Canada.
“This decision will allow us to focus on the significant growth opportunities for our other fire and security businesses, including LenelS2," Carrier told SecurityInfoWatch in a statement at the time.
Bloomberg reports that Germany vowed to look into the acquisition of most of family-owned Viessmann as Europe’s biggest economy tries to safeguard green-technology jobs.
“It is important that the benefits of our energy policy, and profits generated by it, continue to benefit Germany as a business location,” Economy Minister Robert Habeck said in a statement reported by Bloomberg. “We will pay attention to this.”
Carrier said the acquisition is meant to position the company, “as a pure-play, global leader in intelligent climate and energy solutions, especially to capitalize on the rapid energy transition in Europe.
About 70% of Viessman’s business consisted of heat pumps and related accessories, solar PV, batteries and services. Max Viessmann, CEO of Viessmann, will be appointed to the Carrier Board of Directors at closing, which is expected by the end of 2023.
John Dobberstein is managing editor of SecurityInfoWatch.com and oversees all content creation for the website. Dobberstein continues a 34-year decorated journalism career that has included stops at a variety of newspapers and B2B magazines.
