Daikin OYL acquisition
Daikin Europe N.V. (24/10/2006)
In a move designed to maintain its leadership position in the global HVAC market, Daikin Industries Ltd. announced on May 18, 2006 an intended 1.7 billion euro deal to acquire 100% of O.Y.L. Industries Bhd.
The deal includes a 45.2% acquisition via a direct transaction with the 2 main shareholders and the remaining 54.8% via a mandatory general offer (MGO) on the Malaysian stock exchange. The deal has been approved in the meantime by the antitrust committees in the US, Asia, and Europe.
Global player
OYL, headquartered in Malaysia, is a global company operating in the HVAC and commercial air filtration sectors. OYL is currently the fourth largest global applied systems manufacturer and the third largest commercial air filtration manufacturer in the world, with revenue of approximately 1.2 billion euro and operating profit of around 85 million euro for the fiscal year ending June 30, 2005. OYL markets products worldwide under the brands McQuay (HVAC), AAF International (air filtration) and J&E Hall (refrigeration and freezing).
The combination of Daikin’s 22,000 employees and OYL’s 10,400 employees worldwide will result in a reinforced group with over 32,000 personnel. Daikin’s total annual sales of 5.8 billion euro on top of OYL’s 1.2 billion euro will boost annual sales to over 7 billion euro.
Geographic and product synergies for a growing market
The global HVAC market is expected to see further growth in the coming years thanks to increasing penetration into Europe and the BRIC countries (Brazil, Russia, India and China), expansion of Solution Business that combines air conditioning equipment and systems in matured markets such as Japan and the U.S., increasing needs for energy saving and rise of new demand for unconventional air conditioning equipment with a new trend toward natural refrigerants.
The acquisition of OYL is part of Daikin’s strategy to meet these challenges. Synergies of this acquisition include product range and geographic distribution. In Europe, Daikin is strong in products and technologies in the ductless air conditioning segment, especially in the high value-added air conditioning segment. OYL is strong in products, technologies and engineering in the applied business segment, as well as in low-cost HVAC products. In addition, Daikin has established leading positions in Japan, Europe and Asia, whereas OYL has a solid presence in North America and Asia.
Enhanced sales coverage
Daikin believes that the acquisition will enable both Daikin and OYL to further enhance these strengths and address the challenges by complementing one another. Synergies are also present in the cross selling of products in the respective sales networks. Both parties will also benefit from joint purchasing, advertising & promotion structures and shared services.
In short, the OYL acquisition will allow Daikin to offer the widest and highest quality product range in the industry.
