United Technologies to buy GE's security business

AP News
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Posted: Nov 12, 2009 4:54 PM

United Technologies Corp. said Thursday it will buy General Electric Co.'s fire detection and electronic security business for $1.82 billion in a deal to expand its similar operations in North America.

United Technologies already sells portable fire extinguishers, consumer security systems and gas and flame detection products.

GE Security, which is based in Bradenton, Fla., supplies technologies such as its Vigilant-brand fire alarm systems, along with intrusion alarms and video surveillance and access control systems. The business, which is expected to have 2009 revenue of $1.2 billion, has eight manufacturing facilities and about 4,700 employees in 26 countries.

The deal is subject to regulatory approval.

United Technologies said buying GE Security won't affect earnings next year due to restructuring and transaction costs but will likely generate growth in 2011 and beyond.

While United Technologies did not say layoffs would result from the deal, Ari Bousbib, UTC's president of commercial companies, said at a conference in New York that the acquisition will generate "significant cost synergies."

For GE, the sale advances the company's efforts to shed noncore assets and focus on its core strategic businesses, a company spokeswoman said.

GE is reshaping itself as it tries to move beyond a tough year. It is shrinking its dependence on troubled financial unit GE Capital and beefing up industrial divisions that build dishwashers, sonogram machines, locomotives and oil pipeline equipment to help it rebuild profits following the recession. GE is also in talks to sell a 51 percent stake in its NBC Universal entertainment division to the nation's biggest cable TV systems operator, Comcast Corp. GE owns 80 percent of NBC Universal while 20 percent is held by Vivendi SA of France.

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Shares of United Technologies slipped 27 cents to end Thursday's session at $66.70, while General Electric shares slipped 8 cents to $15.75.

Besides fire and security, UTC also owns air conditioner maker Carrier, jet engine maker Pratt & Whitney, Otis elevator, Sikorsky Aircraft and other businesses.