Toshiba, United Technologies Extend Strategic Alliance
United Technologies Corporation (UTX) inked a deal with Japanese engineering and electronics conglomerate Toshiba Corporation to expand the global footprint of their joint venture – Toshiba Carrier Corp. The venture aims to provide energy-efficient building equipment and maintenance services around the world.
Toshiba Carrier, the joint venture of Toshiba and Carrier (a unit of United Technologies), already has significant presence in Japan and focuses on developing engineered commercial air-conditioning solutions. This agreement seeks to reinforce the existing strategic collaboration and will focus on boosting global growth in the field of heating, ventilating and air-conditioning (:HVAC) solutions.
The partnership will blend the distinctive capabilities of the two companies – Toshiba’s forte lies in lighting, batteries and energy management systems, while the U.S. conglomerate possesses a number of group businesses, including elevator manufacturer Otis, air conditioning company Carrier and Pratt & Whitney in the aerospace industry.
The companies will integrate their unique technologies to craft energy-saving air conditioners, lighting fixtures, elevators and other building equipment. Toshiba Carrier will also offer maintenance services, and will accumulate and analyze operational data via sensors and communication to avert breakdowns.
Toshiba Carrier will leverage United Technologies' extensive global sales network to sell its products and building energy management systems in over 160 countries. Targeting intense growth acceleration, the companies intend to double yearly revenues of Toshiba Carrier to $1.6 billion by the next decade.
The agreement calls for the establishment of engineering centers in the U.S. and Europe, while also exploring prospects for overseas manufacturing in India and North America. The venture is aiming to focus on smart cities as well, which are becoming increasingly common in Asia. Specific cooperation schemes will be announced by the companies during the first half of 2015.
The collaboration is set to create deep synergies as it expands the companies’ global footprint and unlocks rich value for its clientele through innovative solutions.
United Technologies currently sports a Zacks Rank #4 (Sell). Better-ranked stocks in the diversified operations industry that look promising now include CLARCOR Inc. (CLC), Compass Diversified Holdings (CODI) and Noble Group Ltd. (NOBGY), each holding a Zacks Rank #2 (Buy).
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