Carrier Global to sell security segment to Honeywell for $5B
Carrier Global (CARR) shares are up following an announcement to sell its security business unit to Honeywell International (HON) for $4.95 billion. This comes as part of Honeywell CEO Vimal Kapur's — who assumed the role in June 2023 — goal to broaden Honeywell's product offerings.
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Video Transcript
JOSH LIPTON: Let's take a look at some trending tickers now. Shares of Carrier Global rising today after the company announced the sale of its security business to Honeywell for nearly $5 billion. So this one interesting, Julie, because you've had some changes in the C-suite relatively recently. You got a new CEO there, took the reins over the summer. So a big, obviously, historic move from him here as he looks to broaden Honeywell's product offerings here.
Got some financial information on the deal as well. Predicts revenue more than 1 billion, it looks like, for the combined security services business. You know, when you look at Honeywell, it hasn't been great for those investors this year. It's down about 10%, though, I mean, it's fair to say, too, they do have plenty of fans on Wall Street. I mean, most covering this name are bullish.
JULIE HYMAN: Yeah. That new CEO, Vimal Kapur, has talked about doing M&A. He's been very explicit that that's been one of the things that is part of his goals. And some analysts saying this was a very logical acquisition for Honeywell to make, this security business from Carrier. Some analysts, though, pointing to that this is maybe a little bit higher-- you know, it's good for Carrier but not as good for Honeywell, maybe a little bit of a high price.
What's interesting, too, is it's also creating a bit of a ripple effect. Allegion, for example, which is a competing business to that Carrier security business, also caught a bid today. Maybe some speculation that there's going to be some other M&A in the business.
By the way, what does this business do? When you talk about security business, this is not like a cybersecurity business. They make electronic locks for big companies, among other things. And it's going to go under Honeywell's building automation segment. They have customers that are big industrial customers-- hospitals, airports, things like that. So that's where it sort of fits into Honeywell.
