Background of the Agreement:
Carrier Global Corporation, a leader in intelligent climate and energy solutions, has agreed to sell its global Commercial Refrigeration business to longtime joint venture partner Haier for $775 million, including approximately $2 billion in net pension liabilities.
Carrier Commercial Refrigeration Overview:
Carrier Commercial Refrigeration employs over 4,000 people worldwide and operates an extensive sales and service network across Europe and the Asia-Pacific region. The transaction does not include Carrier Transicold (transport refrigeration), Sensitech, or the Lynx digital cold chain platform.
Strategic Rationale and Expected Outcomes:
Carrier Chairman and CEO David Gitlin stated that following Carrier’s exit from and increasing competition in the commercial refrigeration space, Haier was identified as the ideal partner for the business’s future growth. He emphasized that this move furthers Carrier’s transformation and positions the company more strongly as a global leader in smart climate and energy solutions.
Haier’s Perspective:
Li Huagang, Chairman and CEO of Haier Smart Home, described Carrier Commercial Refrigeration as a highly respected global company with a renowned brand, cutting-edge technology, and experienced employees delivering outstanding customer solutions. He noted that the acquisition will help Haier build a robust commercial refrigeration platform and accelerate its growth in retail food refrigeration and cold storage sectors.
Use of Proceeds and Financial Impact:
Carrier expects over $500 million in net proceeds from the transaction, which it plans to use to reduce debt. Once its leverage ratio returns to around 2x EBITDA, Carrier plans to initiate share repurchases.
Closing Timeline:
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second half of 2024.