Daikin Industries Acquires O.Y.L., McQuay

June 5, 2006
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Daikin AC (Americas) Inc., which stepped into this country just over a year ago, received a shot in the arm.

Daikin Industries Ltd., the parent company of Daikin AC (Americas), announced that it is acquiring O.Y.L. Industries Bhd, the Malaysian-based global HVAC company that owns U.S.-based McQuay International.

According to Daikin, the acquisition lends the company's extensive technologically advanced product expertise to O.Y.L.'s applied product solutions. Through this move, Daikin said it will continue to target the No. 1 position in the global HVAC market.

"When we learned of this new relationship, we immediately saw it as a win for Daikin and O.Y.L., but more importantly, for meeting the consumer, commercial, and industrial demand for energy-efficient, cost-effective HVAC systems," said Yoshinobu Inoue, president of Daikin AC (Americas). "Our combined expertise will further a total business solution advancement enhancing efficiency, and ultimately, profitability."

According to Inoue, the acquisition will allow Daikin a full-fledged entry into North America, the largest air conditioning market, which Daikin entered last year.

"This partnership will enable both Daikin and McQuay to serve its customers better," said Inoue. "The combination of Daikin's higher-end products with McQuay's applied business foundation will expand opportunities for the entire industry in 2006 and beyond."

After the completion of the acquisition, O.Y.L. said it will continue its operations as a consolidated subsidiary of Daikin. Daikin said a joint committee between both parties will be created to study how best to "maximize the acquisition synergies."

McQuay International Executive Vice President Eric Roberts sees only good things to come.

"The acquisition of OYL/McQuay by Daikin is a positive move for McQuay and all of our North American operations and facilities," said Roberts.

"We expect the combination of Daikin and McQuay in North America to quickly yield significant synergies in distribution, product development, and customer awareness. We're excited about the potential for the combined company."

Roberts did note there would be few, if any, changes in the company's organizational structure, distribution network, or overall market and product strategies. "In North America, our product lines and organizations are highly complementary, with few redundancies," he said.

COMPANIES INVOLVED

For the record, O.Y.L., headquartered in Malaysia, is a global company operating in the HVAC and commercial-use air-filtration business. Established in 1974, O.Y.L. became a member of the Hong Leong Group Malaysia in 1990. In 1994, O.Y.L. acquired McQuay International, which it said accelerated the globalization of its businesses.

According to O.Y.L.'s records, it is currently the fourth-largest global applied (large-scale commercial-use air conditioners) manufacturer and the third-largest commercial-use air-filtration manufacturer in the world.

Daikin Industries is a global provider of residential, commercial, and industrial-use HVACR products and services. It holds market positions in Japan, Europe, China, and Southeast Asia. Daikin is also diversified, with established business developments in fluorochemicals and oil hydraulics. The company is based in Osaka, Japan, and its products are sold in more than 100 countries and have over 22,000 employees worldwide. It said it had $7.2 billion in sales in fiscal year 2005.

Meanwhile, McQuay's Americas headquarters is based in Minneapolis. McQuay International said it has more than 6 million square feet of manufacturing facilities at 12 locations on three continents. It also has over 5,000 employees worldwide. North American locations include the Applied Air Systems offices in Faribault and Owatonna, Minn.; Applied Terminal Systems in Auburn, N.Y.; the Chiller Products offices in Staunton, Va.; and the Parts Division in Minneapolis.

Publication date: 06/05/2006

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