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 After two
years of talks disrupted by economic turmoil and the earthquake-tsunami Daikin
has finalized plans to acquire Goodman Global, a US based maker of residential
AC. The $3.7B deal makes Daikin the largest producer of HVAC equipment in the
world supplanting United Technologies Carrier.
Goodman
has a significant position in the U.S. ducted AC market and is known
for it's high volume, low-cost business design. Sales last year were posted at
$2.1B, mostly in residential product sales.
The
acquisition by Daikin provides access to the large ducted residential market in
North America which Daikin had been hoping to
"conquer" with the ductless minisplit product offering which has been
gaining slow acceptance. The move complements Daikin's prior acquisition of Minneapolis based McQuay
International which brought a full range of commercial and light commercial
products to add to Daikin's product range.
Financial
markets were unhappy with the purchase sending shares down nearly 10% initially
after the announcement. However, losses were pared to 3.5% by the end of the
day.
The
purchase, expected to be approved in the fourth quarter, will
add Goodman's 4,500 workers and $2.1B sales to Daikin's 44,000 workers and
$15.5 sales to make Daikin
the world's largest HVAC maker.
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Editor's Note: CR4 would like to thank Larry Butz, President and CEO of GEA Consulting, for contributing this blog entry, which originally appeared here.
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