Quiver Quantitative - Honeywell International (NASDAQ:HON) has announced a significant expansion of its business portfolio with the acquisition of Carrier Global’s (CARR) security business for approximately $5 billion. This strategic move aims to enhance Honeywell's Building Automation segment, offering an array of products such as electronic locks for a diverse range of clients including hotels, hospitals, airports, and data centers. The acquisition aligns with Honeywell's increasing focus on cloud-based product solutions, catering to the evolving needs of its global clientele.
The deal, confirmed on Friday morning, is a part of Honeywell’s broader strategy to invest substantially in growth opportunities. Honeywell CEO Vimal Kapur, who assumed his role in June, has emphasized the company’s commitment to advancing in areas of automation, aviation, and energy transition. This acquisition is a key step in Honeywell’s plan to allocate at least $25 billion over the next three years for mergers and acquisitions, alongside dividends, capital expenditures, and share repurchases.
Carrier Global (NYSE:CARR), with its primary focus on heating and air-conditioning units, has been realigning its business operations since its separation from United Technologies (NYSE:RTX) in 2020. The company, currently valued at about $44 billion, had previously announced its intent to divest its Fire and Security and Commercial Refrigeration businesses. This sale is part of Carrier’s ongoing efforts to streamline its portfolio, including the exploration of alternatives for its commercial and residential fire unit and the acquisition of Viessmann Climate Solutions for over $13 billion.
The Honeywell-Carrier deal reflects a strategic reshaping of Honeywell’s business model, catering to the increasing market demand for sophisticated, cloud-based automation solutions. Carrier, in turn, aims to use the proceeds from this transaction to reduce its debt, indicating a focused approach towards financial stability and operational efficiency in its core areas.
This article was originally published on Quiver Quantitative