Carrier Air Conditioner Sale

Midea to Buy Latin American Assets, Accelerate Global Expansion

August 8, Home appliance giant Midea Holding Co. Ltd. (000527.SZ) has agreed to buy a 51% stake in Carrier Corp.’s air-conditioner assets in Latin America as it looks to accelerate its global expansion plan.

Carrier Corp. is a subsidiary mainly responsible for managing United Technologies Corp.’s (UTC) air-conditioner businesses in more than 170 countries. Carrier’s revenues hit $11.4 billion last year, the best among its rivals.

Shunde, Guangdong-based Midea recorded air-conditioner sales of RMB 48.3 billion in 2010, accounting for 66% of its total sales, according to its official website.

Latin America

Midea will pay about $223 million for the 51% stake via its wholly owned overseas subsidiary Midea Electrics Netherlands BV, the company said in a filing on Aug. 5.

Carrier will retain the remaining 49% stake in its Latin American assets, which include Brazil-based Springer Carrier Ltd. and Climazon Industrial Ltd.; Aro SA, Carrier SA and Carrier Fueguina SA in Argentina; and Carrier (Chile) SA.

Revenue generated by those companies totaled $621 million in 2010, and net profit was $34.8 million, according to the filing.

The deal has gained approval from Midea’s board of shareholders, but is still awaiting the go-ahead from the Department of Foreign Trade and Economic Cooperation of Guangdong and China’s National Development and Reform Commission.

Eight million air-conditioner units were sold in Latin American countries last year, including 4 million units in Brazil alone, Midea said, and the acquisition is aimed at paving the way for further global expansion in the future.

“I think the acquisition has a lot to do with avoiding costly tariffs that Brazil imposes on imported goods,” a person in charge of a Chinese home appliance enterprise’s overseas operations told China Business News.

“Any company hoping to seize market share in Brazil would have to either set up their own production bases or acquire local assets, and in the case of Midea, acquiring [Carrier’s Latin American assets] would not only help to avoid high tariffs but gain access to mature sales channels,” the person said.

Global Expansion

Last October, Midea bought a 32.5% stake in Egypt’s Misr Refrigeration and Air Conditioning (Miraco) from UTC for $57.48 million, gaining access to Miraco’s products, brands and markets and boosting its presence in Egypt and Africa at large.

Inventing ...The United Inventors Association: Air Conditioning is ...

Welcome to the United Inventors Association of America Daily Inventor Blog. This blog is posted each day with interesting and informative information designed to help inventors at all levels educate themselves about the processes of inventing and product development. But this is just a start! You will find more great educational information on the UIA web site at www.uiausa.org and the UIA Education Forum at www.theuiaforum.org - Check them out! . Carrier used his knowledge of the heating of objects with steam and reversed the process. Instead of sending air through hot coils, he sent it through cold coils (ones filled with cold water). The air blowing over the cold coils cooled the air, and one could thereby control the amount of moisture the colder air could hold. In turn, the humidity in the room could be controlled. The low heat and humidity were to help maintain consistent paper dimensions and ink alignment. Later, Carrier's technology was applied to increase productivity in the workplace, and was exploring ways to add moisture to the air in his textile mill. Cramer coined the term "air conditioning", using it in a patent claim he filed that year as an analogue to "water conditioning", then a well-known process for making textiles easier to process. He combined moisture with ventilation to "condition" and change the air in the factories, controlling the humidity so necessary in textile plants. Willis Carrier adopted the term and incorporated it into the name of his company. This evaporation of water in air, to provide a cooling effect, is now known as Mr. Reyland is the Executive Director of the United Inventors Association of America. The UIA is the oldest and largest inventor organization in the country with over 15,000 inventors active in the many inventor educational programs offered by the UIA. In addition to his role with the UIA, Mr. Reyland is an accomplished inventor with many retail products on the market, and CEO of Obvious Ideas LLC, a Cincinnati based Product Development Company.

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