January 11, 2019

Market volatility curbs UTC fire-safety, security business sale

HBJ File Photo
HBJ File Photo
UTC's Farmington headquarters.
Photo | Contributed
United Technologies CEO and Chairman Gregory Hayes.

Farmington conglomerate United Technologies Corp., which plans to separate into three companies, says it's halted the planned sale of its Chubb fire-safety and security business due to "market volatility."

Instead, the 85-year-old company -- parent of jet-engine maker Pratt & Whitney, UTC Aerospace Systems, newly acquired Rockwell Collins, Otis elevator and Carrier building systems -- is focusing on it's multi-year plan to break apart by 2020, UTC confirmed on Friday. Bloomberg first reported the news on Thursday.

Just hours after announcing the split in November, UTC CEO and Chairman Gregory Hayes during a segment on CNBC said the conglomerate would consider other divestitures as well, which could include Carrier.

"We've been talking about a potential divestiture there," Hayes said on CNBC. "If somebody comes forward with a compelling offer, we will certainly listen."

Bids for Chubb, a United Kingdom-based producer of sprinklers, smoke detectors, fire extinguishers and video surveillance equipment, came in lower than expected, Bloomberg reported, citing sources familiar with the potential sale.

Prospective buyers include private equity firms Apax Partners, PAI Partners and Eurazeo SE, the report said. Bloomberg in November reported UTC's sale of Chubb could fetch about $3 billion.

UTC acquired Chubb for $1 billion in 2003 to expand its offerings beyond aviation. Today, Chubb is part of UTC's Climate, Controls & Security division, which also includes North Carolina's Carrier and Kidde.

Meantime, the conglomerate has already downsized its climate-controls business segment.

In May 2018, Florida-based UTC Climate, Controls & Security announced plans to sell Taylor Co., a global manufacturer of beverage and food equipment including ice cream dispensing equipment, to Illinois-based Middleby Corp. for $1 billion.

Under UTC's planned reorganization, the company's largest segment will be its aerospace unit, including Collins Aerospace Systems -- formed through the combination of UTC Aerospace Systems and Rockwell -- and East Hartford's Pratt & Whitney.

UTC's other two companies would be Farmington's Otis, a manufacturer of elevators and escalators, and Carrier, a global provider of HVAC, refrigeration, building automation, fire safety and security products.

This story has been updated

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