Carrier agrees acquisition of Chinese AC manufacturer

USA: Carrier has signed agreements to acquire Guangdong Giwee Group (Giwee Group) and its subsidiaries, including Guangdong Chigo Heating & Ventilation Equipment Co Ltd (GCHV). 

Formed in 2011, the Giwee Group specialises in VRF and light commercial air conditioners for the Chinese market. 

GCHV is one of the largest central air conditioning manufacturers in China. It operates from a 170m² factory with an annual production capacity of over 1.5 million sets. GCHV claims representation in more than 100 countries with thousands of commercial air conditioning projects worldwide.  In 2018, the sales revenue is said to have exceeded 2.5bn yuan ($384m).

Carrier’s HVAC president Chris Nelson described the acquisition as “an excellent strategic fit” and would support the company’s growth strategy in the global VRF and light commercial market. “Giwee Group has outstanding products and will give Carrier ownership of important technology in the VRF and light commercial segment. In addition, their ability to manufacture these products in the local market will bring an important new capability to our company,” Nelson said.

Quan Zhang, CEO and majority shareholder of the Giwee Group, said: “With Carrier’s significant technical and R&D capabilities and global networks, we look forward to working with Carrier to identify more growth opportunities.”

Confusion

GCHV appears to have grown out of the possibly better-known Chinese manufacturer Guangdong Chigo Air Conditioning, the manufacturer and supplier of budget residential air conditioning systems which many in Europe and elsewhere will have been aware of for many years. 

While the two companies operate independently, ownership of GCHV, however, remains confused.

Both GCHV (Guangdong Chigo Heating & Ventilation Equipment) and Chigo (Guangdong Chigo Air Conditioning Co) use similar logos, albeit GCHV’s logo is green and Chigo’s is the more familiar red.

Chigo (the red one) transferred 40% of Chigo Commercial’s equity to GCHV’s general manager Zhang Quan in 2019. Most recently, Zhang Quan and his management team are thought to have grown this to 70%, with Chigo owning the other 30%. It is not clear from the Carrier announcement whether this is still the current situation, and whether  Carrier’s acquisition will include Chigo’s 30% share. In either case, both GCHV (Guangdong Chigo Heating & Ventilation Equipment) and Chigo (Guangdong Chigo Air Conditioning Co) remain as independent entities.

The Cooling Post has sought clarification.

Carrier expects to close its acquisition of a controlling stake of Giwee Group in the second quarter of 2021, with the remainder expected to close in the third quarter of 2021.