Clearly it is not the best time for selling such a major business unit but I guess that this now gives GE the opportunity to buy something else at a bargain price, which makes a better fit with their enshrined ruling; "if you can’t make No 1 or 2 in the business then divest."

So the opportunity to buy a $2 billion business has come at a good time for UTC. A number of the major competitors in the market were keen to bid but the fit was not so good for them at least not at this price.

The purchase of GE gives UTC a significant boost in the US market both for security and fire detection. In particular they will gain market share in fire detection through acquiring the well respected brand name and business of Edwards Systems Technologies which cost GE some $1.4 billion in 2005.

UTC started their Fire & Security business in 2003 and has since spent some $5 billion in buying or investing in fire detection and electronic security companies around the world. The majority of these acquisitions have been in Europe and China. Kidde and Chubb, UK based companies were acquired in 2003/4. These have proven to be shrewd buys. Both were under-performing and have grown significantly since becoming part of UTC.

We expect that UTC will prove to be a better home for GE Security and through this acquisition and others they will continue to increase their market share in this business. This acquisition is going to have a major impact on the progress of consolidation in the security industry. We cannot see the major players in this industry, none have a market share much above 10%, sitting back much longer on their cash reserves.