Background and Purpose of the Acquisition:
Honeywell has announced it will acquire Carrier Global Corporation’s Global Access Solutions business in an all-cash deal valued at $4.95 billion. This strategic move underscores Honeywell’s focus on expanding its building automation capabilities and its ambition to become a leading provider of security solutions for the digital era.
Transaction Overview and Strategic Fit:
The deal includes both hardware and software solutions and aligns with Honeywell’s strategic priorities in areas such as automation, the future of aviation, and energy transition—all considered key megatrends. The Global Access Solutions unit complements Honeywell Building Technologies and aims to position Honeywell as a leader in high-value, essential building products.
Expected Outcomes:
The acquisition is expected to be immediately accretive to Honeywell’s growth, gross profit margin, and operating margin. It is projected to positively impact cash earnings per share (EPS) in the first full year of ownership. By year five, the deal is anticipated to generate a double-digit cash return on invested capital (cash-ROIC).
Long-Term Impact:
Honeywell CEO Vimal Kapur stated that this acquisition is a natural step toward building a world-leading security platform, expected to contribute over $1 billion in annual sales. He emphasized that combining Honeywell’s advanced security and safety systems will enable customers to maximize performance, efficiency, and cost savings.
Closing Timeline:
The transaction is expected to close by the end of Q3 2024, subject to customary closing conditions and regulatory approvals.
