Honeywell Buys Carrier's Security Business for Nearly $5B, Boosting Automation Portfolio
Portfolio Pulse from Shivani Kumaresan
Honeywell International Inc (HON) is set to acquire Carrier Global Corporation's (CARR) Global Access Solutions business for $4.95 billion in cash. The acquisition, which includes hardware and software solutions, aligns with Honeywell's focus on automation, aviation, and energy transition. The deal is expected to be cash-EPS accretive in the first full year and is anticipated to close by Q3 2024. Honeywell had $7.8 billion in cash as of September 30, 2023. Carrier plans to use the $4 billion net proceeds to reduce debt and resume share repurchases once leverage is back to 2x EBITDA. HON's stock price dropped by 2.58% while CARR's increased by 5.50% in premarket trading.
December 08, 2023 | 2:13 pm
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POSITIVE IMPACT
Carrier's sale of its Global Access Solutions business to Honeywell for $4.95 billion will result in $4 billion in net proceeds, which will be used to pay down debt and resume share repurchases.
Carrier's stock price increase in premarket trading reflects a positive investor response to the divestiture and the intended use of proceeds to improve financial health by reducing debt and resuming share repurchases.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 90
POSITIVE IMPACT
Honeywell's acquisition of Carrier's Global Access Solutions for $4.95 billion is in line with its strategic focus on automation and is expected to be accretive to cash EPS in the first year post-acquisition.
The acquisition is significant for Honeywell as it expands its automation portfolio and is expected to be accretive to cash EPS, indicating a positive financial impact. However, the short-term stock price reaction is negative, possibly due to the market digesting the news and the cost of the acquisition.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90