Topline

American HVAC firm Carrier Global disclosed Tuesday that a German heating company it bought for roughly 12 billion euros serviced an Iranian embassy twice after the acquisition closed in 2024—a disclosure that illustrates the compliance blind spots that come with mega-deals.

Key Facts

A subsidiary Carrier acquired in January 2024 known as Viessmann provided heating maintenance services to the embassy of Iran in Austria on two occasions after the acquisition, generating about $1,600 in revenue and about $500 in profit, according to a Securities and Exchange Commission filing.

Carrier said in the filing Viessmann “will not engage in any future transactions with the embassy,” noting the services were related to a contract entered into before the acquisition.

CARR shares fell nearly 9% to $63.11 on Tuesday, even as the company raised its full-year adjusted earnings-per-share outlook to about $2.90 and projected up to $23 billion in sales.

Big Number

$52.4 billion. That is Carrier Global’s market capitalization as of Tuesday.

Tangent

Carrier reported $6.4 billion in sales in its latest quarter alongside adjusted earnings per share of $0.86, a 7% decline year-over-year. The company also reported a 40% increase in orders, with commercial HVAC orders jumping 65%.

Key Background

Carrier completed its acquisition of Viessmann right after the start of the new year in 2024, securing the company for roughly 12 billion euros, or about $12.9 billion. The agreement was one of the largest industrial deals in recent European history. The Viessmann deal brought a sprawling network of European distributors and service contracts under Carrier’s ownership, all of which predated the acquisition and resulted in the Iranian embassy transactions. The services provided by the subsidiary had to be disclosed under the Securities Exchange Act, which mandates that companies report any transactions with sanctioned entities regardless of dollar size.