Honeywell, a U.S. industrial giant, announced on Friday that it would acquire the security unit of Carrier, a leading air conditioner maker, for $4.95 billion in cash.

The deal, which is the largest for Honeywell’s new CEO Vimal Kapur, will expand its building safety business and give it access to popular security brands such as Onity and Supra.

Carrier’s security unit, which offers residential, commercial and industrial security systems, was previously considered for a spin-off, according to Reuters. The deal boosted Carrier’s shares by 4.3%, while Honeywell’s shares dropped by 1.4%.

Analysts said the deal was a strategic fit for Honeywell, but also raised concerns about the high valuation and the weak demand for building technologies. The deal is expected to close by the third quarter of 2024 and to add to Honeywell’s cash earnings per share in the first year. Carrier said it would use the net proceeds of about $4 billion to reduce its debt.

Honeywell is a global leader in creating and delivering innovative solutions for various industries, such as aerospace, commercial real estate, energy, healthcare, and more.

Honeywell operates in four areas of business: aerospace, building technologies, performance materials and technologies (PMT), and safety and productivity solutions (SPS).

Honeywell also offers a range of products for building automation and safety, such as access controls, control panels, fire, intrusion detection, sensors and more. Honeywell is committed to driving sustainability transformation and shaping the future of travel with its Environmental Sustainability Index and other insights.

Stealth signs agreement with Honeywell to progress commercialisation of Autonomous Security Vehicles

Permira Funds agrees to acquire GGW Group, a European insurance brokerage platform