March 21, 2014

CIC to acquire stake in Otis E&M Phils. Listed appliance manufacturer Concepcion Industrial Corp (CIC, Not Rated)

disclosed to the Exchange that it will amend the articles of partnership of its joint venture vehicle Concepcion-Carrier Air Conditioning Corp to include the sale and servicing of elevators, escalators, moving walkways and shuttle systems, and related parts and components.

This is ahead of a move by the latter to acquire a majority stake in elevator and escalator provider Otis E&M Philippines. This is subject to the completion of due diligence requirements and final agreement with United Technologies Corp-Asia Pte with which it is forming a joint venture. CIC also announced cash dividends of P0.59 per share to stockholders as of record date April 2, payable on or before April 30.

Our Take: We view this development as a positive move by CIC to expand beyond its refrigerator and air-conditioning
business into other related industrial building products. CIC has the ability to leverage existing building contracts and relationships to cross-sell this new product line and associated service contract. – WealthSec