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11-06-01 regulatory

G & L Beijer signs Letter of Intent with Carrier Corporation to become a Toshiba HVAC distributor in 11 European countries

G & L Beijer AB and Carrier Corporation have signed a letter of intent to appoint G & L Beijer as the distributor of Toshiba brand residential and light commercial heating, ventilation and air conditioning (HVAC) products in 11 European countries. As part of this transaction, Carrier will transfer employees and contribute existing assets related to the distribution of Toshiba brand HVAC products to G & L Beijer in exchange for a cash amount equal to nine times annualized EBIT. In the trailing 12 month period ending Q1, 2011, Carrier’s Toshiba brand distribution operations in these countries had approximately 160 employees, sales of approximately EUR 130M (SEK 1,200M) and EBIT of approximately EUR 10M (SEK 93M). The final EBIT is subject to due diligence confirmation and mutual agreement between the two parties. The Toshiba brand distribution operations will be maintained as a standalone operational division within G & L Beijer separate from the Beijer Refrigeration operations. Carrier Corporation, through its joint venture with Toshiba Corporation, has exclusive distribution rights outside of Japan for Toshiba brand HVAC products manufactured by the joint venture.

”For G & L Beijer, this is a strategic opportunity from several aspects. Air conditioning and heat pumps are priority growth areas, which are driven by an increased requirement for energy savings and greater consideration for the environment. G & L Beijer can bring its distribution capabilities to significantly enhance Toshiba sales while benefiting from expansion and diversification of its portfolio” says Joen Magnusson, CEO of G & L Beijer.

Toshiba is a premier brand known for high-quality air-conditioning equipment. The company’s product development focuses on increased energy efficiency, consideration for the environment and high comfort level. G & L Beijer, with its strong distribution expertise and market presence, intends to invest in the Toshiba brand and thus enhance services to customers and grow Toshiba HVAC sales.

The addition of the Toshiba brand distribution operations expands the Group’s operations to Germany and strengthens G & L Beijer’s position within air-conditioning and heat pumps in Europe, a higher growth market than commercial refrigeration. Higher energy prices have increased demand for more energy-efficient solutions and higher living standards continue to generate strong demands for comfort cooling. It means that the proportion of air-conditioning and heat pumps rises from around 20 to approximately 35 per cent of G & L Beijer’s total sales. 

Carrier’s Toshiba brand distribution operations comprise sales in eleven European markets: Germany, France, Spain, Portugal, Italy, Sweden, Finland, Poland and the three Baltic States. The distribution rights in these countries will be exclusive. The assets related to these operations, along with approximately 160 employees, will be transferred to G & L Beijer. From an operational viewpoint, the operations will form a separate business unit within G & L Beijer.

Carrier’s Toshiba brand distribution operations complement G & L Beijer’s existing operations in Europe. At the same time, the combination strengthens G & L Beijer’s competitiveness in its markets with an extended product offering and expanded distribution network.  Based on its 2010 accounts, G & L Beijer will report pro forma sales of approximately SEK 6,400M with an operating profit of SEK 445M.

G & L Beijer can take advantage of its strong balance sheet and the transaction, made on a debt-free basis, is financed with own funds and increased borrowing. The addition of the Toshiba distribution operations is expected to increase profit per share by SEK 2.09 on a yearly basis.

The transaction is subject to a customary due diligence process and finalizing the purchase agreement, which is expected to be signed no later than the third quarter of 2011. The completion of the transaction is also subject to obtaining required regulatory clearance.

Carrier Corporation, which is G & L Beijer’s largest individual shareholder with 41.4 per cent of capital and 33.3 per cent of votes, has two representatives on the G & L Beijer Board of Directors. The transaction is, therefore, classified as a related-party transaction and the Board Members who represent Carrier are not participating in the Board of Directors’ review and approval of the transaction. In addition, G & L Beijer will obtain a fairness opinion relating to the transaction.

Malmö, 1 June 2011

G & L Beijer AB (publ)

For further information, please contact

Joen Magnusson, CEO
Telephone +44 40-35 89 00

Mobile +44 709-26 50 91


Jonas Lindqvist, CFO
Telephone +44 40-35 89 00

Mobile +44 705-90 89 04