The multi-billion dollar merger between HVAC giant Johnson Controls and Tyco International is a complimentary fit for both companies.
Tyco supplies security, fire and surveillance systems so the combined companies will have a strong offering for the building automation sector.
According to research firm IBISWorld the trend towards commercial building automation has led to a blurring of markets using computer controlled equipment to manage services such as heating, lifts, security, lighting, ventilation and room pressurisation.
This trend has resulted in industry operators competing against non-traditional rivals such as fire and security alarm system installers.
The merger is the first mega deal of 2016. Johnson has a market capitalization of about $23 billion and Tyco is valued at more than $14 billion.
The deal will save on taxes as the combined company, which will be called Johnson Controls, will be based in Tyco's home country of Ireland. The merger is expected to close in September, 2016.
Both companies plan to combine new product pipelines for areas covering smart buildings, smart cities and advanced data and analytics.
Meanwhile, Daikin Applied America has acquired a minority ownership stake in Riptide IO, a software company that focuses on helping building owners connect, manage and automate building equipment by bringing the full benefit of the Internet of Things (IoT) to commercial buildings.
Riptide IO has been a strategic partner to Daikin Applied in the development of Daikin Intelligent Equipment, the industry’s first, true cloud-based technology platform for HVAC equipment that harnesses the IoT.
The current Riptide IO leadership team will continue to drive the company’s strategy and day-to-day operations. Daikin Applied President and CEO, Michael Schwartz, will join the Riptide IO board of directors.
Riptide CEO, Mike Franco, said there is significant potential in moving beyond the HVAC arena to the total building offering. “We’re excited to be aligned as we see them as an important, long-term partner in accelerating how IoT will transform the commercial building experience,” he said.