Unsupported browser

For a better experience please update your browser to its latest version.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Daikin Buys U.S. Air-Conditioner Maker Goodman for $3.7 Billion

Daikin the world’s largest air-conditioner maker, will buy Goodman Global Inc. for $3.7 billion (£2.3bn) to expand its home heating and cooling business in North America.

According to Bloomberg, the companies and Goodman owner Hellman & Friedman LLC signed an agreement today under which Osaka, Japan-based Daikin will buy all of the closely held company’s stock, according to a statement. Daikin will use bonds and loans to help finance the purchase, and said it doesn’t plan to sell stock.

Noriyuki Inoue, chief executive officer of Daikin Industries Ltd., left, shakes hands with David Swift, chief executive officer of Goodman Global Inc., during a news conference in Osaka, Japan.

Noriyuki Inoue, chief executive officer of Daikin Industries Ltd., left, shakes hands with David Swift, chief executive officer of Goodman Global Inc., during a news conference in Osaka, Japan. Photographer: Yuzuru Yoshikawa/Bloomberg

Japan’s largest air-conditioner maker will announce the plan to acquire Houston-based Goodman from buyout firm Hellman & Friedman LLC as early as today, the Nikkei newspaper said, without citing anyone.

Japan’s largest air-conditioner maker will announce the plan to acquire Houston-based Goodman from buyout firm Hellman & Friedman LLC as early as today, the Nikkei newspaper said, without citing anyone. Photographer: Tetsuya Yamada/Bloomberg

.The deal gives Daikin more than 900 distribution points as it tries to boost sales for home heating and air-conditioning systems. Daikin fell the most in almost a month as Moody’s Investors Service said the acquisition may prompt it to cut the company’s credit rating.

“I’m a little worried about the size of the deal,” Shoichi Arisawa, a senior analyst at Iwai Cosmo Securities Co. in Tokyo, said by phone. “It may be a little too big for Daikin, especially in an uncertain time like this.”

Daikin shares fell 3.5 percent, the most since Aug. 1, to close at 2,073 yen in Tokyo trading. Shares are down 1.7 percent this year, compared with a 7.3 percent gain in the Nikkei 225 Stock Average.

The transaction will be completed by Dec. 31, pending regulatory approval, the companies said. Daikin plans to borrow money for the purchase from the Japan Bank for International Cooperation to take advantage of the “emergency facility to counter the strong yen,” it said in the statement.

The deal is an opportunity for Daikin to increase its business “where we have little presence,” Noriyuki Inoue, chief executive officer of Daikin, said at a press conference in Osaka. The deal will also help it expand in “emerging and high- volume markets,” he said.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.