Kidde accepts takeover bid from UTC
HARTFORD, Conn. - After receiving an offer a bit sweeter than the previous one, fire extinguisher manufacturer Kidde has accepted a GBP 1.44 billion ($2.8 billion) takeover bid from United Technologies Corp.
The board of the UK-based company said the offer represents a fair price for the company, which had rebuffed UTCÃ¢â‚¬â„¢s previous bid.
The deal, reached on Dec. 16 after back and forth discussions between the two firms over a two-month period, paves the way for UTC to add fire-protection products to its Chubb security division, which includes the Counterforce alarm business. It also reunites Kidde with Chubb - the two companies made up Williams plc, before Chubb was purchased by UTC in 2003.
Paul Jackson, a spokesman for UTC, could not comment on the deal citing the UKÃ¢â‚¬â„¢s Takeover Panel regulations.
Jack Mallon, managing director of Mallon Associates, said the deal shows that UTC is serious about playing a major role in the security market.
Ã¢â‚¬Å“It shows that GE and Honeywell will not have a free ride in the security product end of the business,Ã¢â‚¬Â Mallon said. Ã¢â‚¬Å“The deal indicates that United Technologies wants to be a major force in this market.Ã¢â‚¬Â
Mallon also noted that the deal - as well as HoneywellÃ¢â‚¬â„¢s $1.7 billion bid for Novar, which has a security, fire and building controls division - is unusual considering the weakened dollar and the strong euro. He said the industry should be experiencing a surge from European companies - such as Assa Abloy, Group 4/Securicor and Securitas - looking to increase their market share in the United States amid the current financial markets.
Ã¢â‚¬Å“UTC reversing that trend is an interesting development,Ã¢â‚¬Â he said. Ã¢â‚¬Å“It is remarkable that U.S. companies can afford to pay that price.Ã¢â‚¬Â
For UTC, the acquisition of Kidde not only solidifies the companyÃ¢â‚¬â„¢s mark in the industry, it also augments its presence.
Ã¢â‚¬Å“KiddeÃ¢â‚¬â„¢s addition will further enhance UTCÃ¢â‚¬â„¢s product portfolios. With Otis elevators, Carrier HVAC systems and Chubb electronic security, we already have a pervasive presence in buildings worldwide. KiddeÃ¢â‚¬â„¢s industrial fire protection and suppression products will further augment this presence,Ã¢â‚¬Â UTC Chairman and Chief Executive Officer George David said in a prepared statement.