Carrier to Buy Toshiba’s Stake in TCC

Carrier Global (CARR) has entered into an agreement to acquire Toshiba’s (TOSYY) stake in Toshiba Carrier Corporation, their variable refrigerant flow (VRF), and light commercial heating, ventilation, and air conditioning (HVAC) joint venture. The transaction is expected to close by the end of Q3 2022.

TCC was established in 1999. It manufactures energy-efficient VRF and HVAC systems for light commercial applications. Carrier says that TCC fits well into its sustainability goals of reducing its customers’ carbon emissions by at least one gigaton by 2030.  

Carrier CEO Dave Gitlin commented: “We look forward to offering complementary, high-performance and sustainable solutions to our customers that will help them achieve their environmental goals.”   

Toshiba Brand

The deal involves Carrier taking over TCC’s global manufacturing and R&D facilities. The business will retain the iconic Toshiba brand and Toshiba will retain a 5% stake in the business. Carrier will consolidate more than $2 billion in unconsolidated revenue.

Carrier expects the TCC acquisition to more than double its sales in the rapidly growing global VRF and light commercial segment.

Geographic Reach

The deal for TCC comes after Carrier recently acquired China-based HVAC products manufacturer Guangdong Giwee Group. Carrier explains that the Guangdong Giwee acquisition strengthens its portfolio of environmentally responsible solutions. 

The company explains that the TCC deal is another step in simplifying its HVAC joint venture structure. It adds that the acquisitions demonstrate its commitment to invest in growth and to broaden its geographic reach. 

Carrier plans to distribute a quarterly dividend of $0.15 per share on February 10.

Analysts’ Take

In January, Jefferies analyst Stephen Volkmann reiterated a Buy rating on Carrier Global stock with a price target of $65, which suggests 41.80% upside potential.

Consensus among analysts is a Moderate Buy based on 4 Buys and 6 Holds. The average Carrier Global price target of $59.50 implies 29.80% upside potential to current levels.

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