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The American owner of Chubb, Carrier Global Corporation, has agreed to sell its Chubb fire and security business to APi Group Corporation, for $3.1 billion. Carrier says that it’s to focus on its core businesses – it offers from fire to security to commercial refridgeration – and to re-allocate the proceeds.
Based in the United Kingdom, Chubb offers fire safety and security services from design and installation to monitoring and maintenance. APi is stressing to shareholders that it is looking to make more than half of its revenue service-based, from recurring services (rather than one-off installs of products). Chubb has about 13,000 employees globally and a sales and service network spanning 17 countries in Europe, Asia Pacific and Canada.
Carrier reports that its global fire and security products business is not part of this transaction.
Carrier Chairman & CEO Dave Gitlin said: “Carrier continually assesses all aspects of our global portfolio to ensure alignment with our strategic business priorities and optimal value for our stakeholders. This transaction drives greater focus for Carrier and allows us to re-allocate proceeds from the divestiture toward our higher strategic imperatives. It also provides Chubb the opportunity to unlock new potential, building on its history and dedication to customer service excellence, its 200-year brand legacy and highly skilled network of global service providers and technicians. We look forward to seeing the growth potential Chubb will have under the ownership of APi Group.”
The proposed sale – subject to a consultation process and regulatory approvals – is expected to close late this year or early next, said Russ Becker, APi’s President and Chief Executive Officer when he reported the company’s financial results for the three and six months to June 2021.
He said the acquisition will elevate APi to the world’s leading life safety services provider. He said: “Similar to APi, Chubb is a people-centered business. We look forward to welcoming Chubb’s 13,000 employees to our family of businesses and supporting their development as leaders, as the business shifts from a non-core asset to a paramount strategic priority within APi. We believe our combined leadership team will drive towards maximising business performance and capitalising on future cross-selling opportunities. We believe there is significant future value creation opportunity as we combine our two organisations and realise revenue as well as cost synergies.”
APi Co-Chair James E Lillie described Chubb as ‘a sleeping giant’ that ‘will be a core asset for us that we plan to invest behind in the years to come. We believe the transaction will be highly accretive with compelling synergies, complement revenue growth through cross-selling certain products and services and provide meaningful opportunity for margin expansion.’