Carrier Reveals Subsidiary Serviced Iranian Embassy After Acquisition

Carrier Global disclosed on Tuesday that a German heating company it acquired in early 2024 carried out maintenance work for the Iranian Embassy in Austria on two occasions after the acquisition was completed. The disclosure, made in filings with the U.S. Securities and Exchange Commission, highlights the compliance challenges that can arise when large multinational acquisitions bring existing customer contracts under new ownership.

According to the SEC filing, Viessmann, which Carrier acquired in January 2024, performed heating maintenance services for the Iranian Embassy in Austria twice following the completion of the transaction. The work generated approximately $1,600 in revenue and about $500 in profit. Carrier said the services were provided under a contract that had been signed before the acquisition closed.

The company stated in its filing that Viessmann “will not engage in any future transactions with the embassy,” adding that the work stemmed from a pre-existing agreement. Carrier also disclosed the matter in a separate regulatory filing.

Carrier shares fell nearly 9% on Tuesday to $63.11, despite the company raising its full-year adjusted earnings-per-share forecast to approximately $2.90 and projecting annual sales of as much as $23 billion.

As of Tuesday, Carrier Global had a market capitalization of approximately $52.4 billion.

For its latest quarter, Carrier reported revenue of $6.4 billion and adjusted earnings per share of $0.86, representing a 7% year-over-year decline in adjusted EPS. The company also reported a 40% increase in total orders, including a 65% jump in commercial HVAC orders.

Carrier completed its acquisition of Viessmann at the beginning of 2024 in a deal valued at roughly 12 billion euros, or about $12.9 billion. The transaction ranked among the largest industrial acquisitions in Europe in recent years and brought Viessmann’s extensive network of distributors and existing service contracts under Carrier’s ownership. Those inherited agreements included the maintenance work performed for the Iranian Embassy. Under the Securities Exchange Act, publicly traded companies are required to disclose transactions involving sanctioned entities, regardless of the amount involved.