Carrier to divest commercial and residential fire business in $3 billion sale

Carrier Global Corporation has entered into an agreement to sell its Commercial and Residential Fire business to an affiliate of Lone Star Funds for $3 billion.

As reported by Carrier, this sale marks a key stage in its transformation into a more streamlined company.

The divestiture is expected to close by the end of 2024, pending regulatory approvals.

The sale follows Carrier’s acquisition of Viessmann Climate Solutions in January and is part of a series of business exits, including its Industrial Fire and Global Access Solutions businesses.

The Commercial Refrigeration sale is also expected to close by the third quarter of 2024.

Carrier to focus on core operations following business exits

Carrier Chairman and CEO, David Gitlin, said the sale represents a major step towards the company’s planned transformation: “The sale of our Commercial and Residential Fire business marks a defining step in our planned business exits critical to our transformational journey to becoming a focused, agile, higher-growth, pure-play company.”

Gitlin noted that Carrier has now completed deals for all its intended divestitures.

These sales have collectively generated over $10 billion in value, reflecting what he described as “tremendous dedication” by the company’s teams.

The recent transactions are expected to allow Carrier to focus on its core business operations.

Proceeds from sale to support debt reduction and share repurchases

Carrier has been reducing its net debt significantly this year, following its acquisition of Viessmann Climate Solutions.

The company has already cut its debt by more than $5 billion, primarily through the repayment of outstanding loans and notes.

The company intends to use the estimated $2.2 billion in net proceeds from this latest sale to continue its debt reduction and support share repurchases.

This move aligns with the company’s broader financial strategy aimed at strengthening its balance sheet and boosting shareholder value.

Regulatory approvals expected by late 2024

The sale of Carrier’s Commercial and Residential Fire business is expected to be finalised by the end of 2024, pending regulatory approvals and standard closing conditions.

The company continues to work closely with advisors and legal counsel to ensure a smooth transition.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as financial advisors to Carrier for the deal, with legal advice provided by Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Linklaters LLP.

Carrier sells commercial and residential fire business for $3 billion: summary

Carrier Global Corporation has signed an agreement to sell its Commercial and Residential Fire business to an affiliate of Lone Star Funds for $3 billion.

This transaction is part of Carrier’s ongoing strategy to streamline its business operations.

The deal follows other recent divestitures and is expected to close by the end of 2024, subject to regulatory approvals.

Carrier plans to use the proceeds to reduce its debt and fund share repurchases.

Financial advisors and legal counsel have been engaged to support the deal’s completion.