Dow Jones giant Honeywell International struck a deal to buy Carrier Global's security business for nearly $5 billion, the two companies announced early Friday. Honeywell stock faded in early trade on the news while CARR stock jumped.
Honeywell agreed to purchase Carrier's Global Access Solutions business for $4.95 billion in an all-stock transaction. The access solutions unit offers security services, electronic locking systems and contactless key solutions for company buildings, hospitals and hotel chains.
Charlotte, N.C.-based Honeywell said the purchase will bolster its building automation segment and includes both hardware and software solutions. The deal also supports the company's plans to realign its portfolio into three main divisions - automation, the future of aviation and energy transition.
Honeywell CEO Vimal Kapur said the deal is a "natural fit" and expects the security platform to generate more than $1 billion in annual revenue as well as cash-earnings-per-share accretive in the first full year of ownership.
Carrier — a leading manufacturer of heating, ventilation and air conditioning equipment and an S&P 500 stock — expects about $4 billion in net proceeds from the transaction, which it intends to use to pay down debt. The Palm Beach Gardens, Fla.-based energy solutions provider also has planned exits for its industrial fire, residential and commercial fire, and commercial refrigeration businesses as part of its higher-growth strategy.
The companies expect the deal to close before Q3 2024, subject to regulatory approvals and closing conditions.
Honeywell Stock
Honeywell stock faded 1.6% Friday after the announcement. Shares are working up the right side of a cup base, in a consolidation since the start of 2023. Honeywell stock fell 9.2% so far this year through Friday's close.
CARR stock surged 4.5% Friday. That put the stock on track to pass a 54.19 buy point in a three-weeks tight pattern formed just after the stock rebounded above key levels of technical support.
Carrier is trending toward its record high of 60.04 from early August, and up nearly 34% in 2023 through Friday.
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