RACA Journal I May 2026 www. refrigerationandaircon. co. za 5
INTERNATIONAL NEWS
WHY HVAC & R IS HOT FOR M & A
By Eamonn Ryan
Globally, the HVAC & R sector has quietly become one of the busiest playgrounds for mergers and acquisitions( M & A), with global deal-making at levels not seen in years, according to a 2025 report by Origin Merchant Partners titled M & A Review on HVAC & R. international news
From multi-billion-dollar megadeals involving industrial giants to a steady stream of mid-market bolt-ons, the industry is in the middle of a structural reshaping. Behind this wave lies a mixture of regulation, technology shifts and the growing appeal of HVAC as a stable, cash-generating business. A striking example came when Bosch agreed to acquire Johnson Controls’ residential and light-commercial HVAC assets, including its stake in the JCI-Hitachi joint venture, in a deal worth around USD8-billion. The purchase catapults Bosch into a much stronger position in the global home-comfort space, giving it scale and access to markets that would have taken years to develop organically. This was not simply about adding volume; it was a play for presence and positioning in an increasingly competitive climate sector.
Carrier has been equally active but from a different angle. The group is reshaping its portfolio by both acquiring and divesting. Its purchase of Viessmann Climate Solutions expanded Carrier’ s reach into the premium European heating and energy solutions market, while sales of non-core units helped streamline focus on connected, energy-efficient building systems. For Carrier, acquisitions are not only about growth but also about pruning – making sure the portfolio reflects a clear vision of the future.
Daikin has been surgical, pursuing companies in niche but fast-growing segments. Recognising the surge in demand for cooling in data centres, the Japanese manufacturer has acquired specialists in controls and high-density cooling. Data centres are power-hungry and thermally challenging, and keeping them efficient is a business in itself. By buying its way into this space, Daikin is hedging against slow growth in conventional air conditioning and anchoring itself in one of the fastest-growing verticals.
Further down the value chain, consolidation is happening just as quickly. Lennox and other established brands have been bolstering their aftermarket and distribution arms, acquiring parts suppliers and service businesses. For them, it’ s about owning the customer relationship beyond the initial sale. Service contracts, spare parts and monitoring generate predictable, recurring revenues – the kind that investors love. Private equity has spotted this too – and is heavily involved in the burgeoning
African cold chain – and many mid-market deals now involve funds building platforms of service providers, then layering on bolt-on acquisitions.
So why now? Several forces are converging, says the report. Regulatory change is perhaps the most obvious. Governments around the world are tightening restrictions on high-GWP( Global Warming Potential) refrigerants and raising minimum efficiency standards. For many companies, buying the technology and expertise they need is faster and less risky than developing it in-house. The transition to low-GWP refrigerants, in particular, is proving a catalyst for deals.
Another factor is the growing importance of digital controls, monitoring and services. The days of selling just a piece of hardware are over. Customers expect systems that can be managed remotely, tuned in real-time and integrated into broader building-management platforms. This has pushed manufacturers to acquire software firms and controls specialists to accelerate their capabilities in areas where they are not traditionally strong.
Then there’ s the irresistible pull of data centres. As cloud computing and AI drive massive demand for processing power, the need for efficient, specialised cooling is skyrocketing. Unlike traditional air conditioning, this requires advanced engineering, high reliability and often new technologies like liquid cooling. No wonder Daikin and others are racing to acquire their way into the space.
The days of selling just a piece of hardware are over.
Freepik. com
RACA Journal I May 2026 www. refrigerationandaircon. co. za 5