UTC to split into three separate companies

Climate, Controls and Security business will be renamed Carrier
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Thursday, November 29, 2018

FARMINGTON, Conn.—UTC this week announced that it will be separating its business into three different companies: United Technologies, which will be comprised of the company’s aerospace business; Carrier, which will be the new name for the Climate, Controls and Security business; and Otis Elevator Company.

"Our decision to separate United Technologies is a pivotal moment in our history and will best position each independent company to drive sustained growth, lead its industry in innovation and customer focus, and maximize value creation," United Technologies chairman and CEO Gregory Hayes said in the announcement. "Our products make modern life possible for billions of people. I'm confident that each company will continue our proud history of performance, excellence and innovation while building an even brighter future. As standalone companies, United Technologies, Otis and Carrier will be ready to solve our customers' biggest challenges, provide rewarding career opportunities, and contribute positively to communities around the world."

According to the announcement, Otis and Carrier are expected to spin-off of UTC, both being subject to the satisfaction of customary conditions, “including final approval by UTC's Board of Directors, receipt of a tax opinion from counsel, the filing and effectiveness of a Form 10 registration statement with the U.S. Securities and Exchange Commission and satisfactory completion of financing.”

Hayes will oversee the transition and will continue in his current role as UTC Chairman and CEO following the separation. UTC expects the separation to be completed in 2020, with separation activities occurring within the next 18 to 24 months. “There can be no assurances regarding the ultimate timing of the separation or that the separation will be completed,” the announcement noted.

Carrier provides “HVAC, refrigeration, fire, security and building automation technologies with 2017 sales of $17.8 billion,” according to the recent announcement. The company's portfolio will include the Carrier, Kidde, Edwards, LenelS2 and Automated Logic brands.

Following this move, UTC will primarily consist of Pratt & Whitney and Collins Aerospace. “Combined sales of the two businesses totaled $39.0 billion in 2017 on a pro forma basis,” the company said in its announcement.  Collins Aerospace was formed through the combination of UTC Aerospace Systems and Rockwell Collins; UTC announced the completed acquisition of Rockwell Collins on Nov. 26.

Otis, which manufactures elevators, escalators and moving walkways, experienced $12.3 billion in sales in 2017